nep-dev New Economics Papers
on Development
Issue of 2019‒08‒12
fifteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Do early-ending conditional cash transfer programs crowd out school enrollment? By Martin Wiegand
  2. Behavioral Impact of Disaster Education: Evidence from a Dance-Based Program in Indonesia By Shoji, Masahiro; Takafuji, Yoko; Harada, Tetsuya
  3. The Income Elasticity of Child Labour: Do Cash Transfers Have an Impact on the Poorest Children? By Luca Pellerano; Eleonora Porreca; Furio C. Rosati
  4. The Impact of Microcredit on Agricultural Technology Adoption and Productivity: Evidence from Randomized Control Trial in Tanzania By Yuko Nakano; Eustadius F.Magezi
  5. Do African economies grow similarly? By Franses, Ph.H.B.F.
  6. Price Discrimination in Bribe Payments: Evidence from Informal Cross-Border Trade in West Africa By Sami Bensassi; Joachim Jarreau
  7. Foreign direct investment & petty corruption in Sub-Saharan Africa: An empirical analysis at the local level By Donaubauer, Julian; Kannen, Peter; Steglich, Frauke
  8. Income Inequality and Government Transfers in Mexico By Frederic Lambert; Hyunmin Park
  9. Multi-dimensional poverty among adults in Central America and gender differences in the three I’s of poverty: Applying inequality sensitive poverty measures with ordinal variables By José Espinoza-Delgado; Jacques Silber
  10. The human capital peace dividend By Olga Namen; Mounu Prem; Juan F. Vargas
  11. International Child Sponsorship and School Performance: Evidence from Goma (DRC) By Domenico Rossignoli; Sara Balestri; Simona Beretta; Mario A. Maggioni
  12. Impacts of Labor Market Institutions and Demographic Factors on Labor Markets in Latin America By Adriana D. Kugler
  13. Is the sectoral aid allocation within countries need-oriented? By Eger, Jens; Öhler, Hannes; Rudolph, Alexandra
  14. The effect of government contracting with faith-based health care providers in Malawi By Wiktoria Tafesse; Gerald Manthalu; Martin Chalkley
  15. Fiscal Buffers for Natural Disasters in Pacific Island Countries By Hidetaka Nishizawa; Scott Roger; Huan Zhang

  1. By: Martin Wiegand (Vrije Universiteit Amsterdam)
    Abstract: This paper explores how a conditional cash transfer program influences students’ schooling decisions when program payments stop in the middle of the school career. To that end, I examine Mexico’s Progresa, which covered students only until the end of middle school (at age 15) in its early years. The experimental setup permits to study the program’s impact on the probability to continue with high school after middle school. Despite initial randomization, the program itself has likely rendered the respective samples of middle school graduates in the treatment and the control group incomparable. To account for this, I employ a newly developed semiparametric technique that uses a combination of machine learning methods in conjunction with doubly-robust estimation. I find that exposure to Progresa during middle school reduced the probability to transfer to high school by 10 to 14 percentage points. Possible explanations for this effect include parents’ loss aversion, motivation crowding, anchoring, and classroom peer effects.
    Keywords: education, conditional cash transfer, Progresa, machine learning, doubly-robust estimation, loss aversion, motivation crowding, anchoring, classroom peer effects, Mexico
    JEL: I22 I25 O15 J24 D04 D91 C52
    Date: 2019–07–31
  2. By: Shoji, Masahiro; Takafuji, Yoko; Harada, Tetsuya
    Abstract: Despite its potential role in reducing disaster mortality, the rigorous evaluation of the impact of disaster education on children’s disaster responses, such as evacuation behavior, is scarce. This study examines the impact of a newly introduced Indonesian program on students’ earthquake response. The program is carefully designed based on psychological theories and anecdotal lessons from different countries. It is also easy to understand and cost-effective. Exploiting the fact that the treatment schools for the pilot program were selected based on two observable criteria, we employ the propensity score weighting estimation. The results show positive effects on perception regarding students’ ability to cope with disaster risk and likelihood of taking appropriate response during an earthquake. The participants are also more likely to self-learn and have higher knowledge of disaster risks. Furthermore, there exists a significant effect on earthquake response even among students with poor learning attitude at school. This feature is preferable for disaster education in developing countries, as those residing in disaster-vulnerable areas tend to have poor educational background.
    Keywords: disaster education; disaster response; non-formal education; Indonesia
    JEL: I25 O53 Q54
    Date: 2019–08–06
  3. By: Luca Pellerano (International Labour Organization and Institute for Fiscal Studies); Eleonora Porreca (Bank of Italy,DG Economics,Statistics and Research,Statistical Analysis Directorate); Furio C. Rosati (CEIS & DEF University of Rome "Tor Vergata")
    Abstract: The possible non linearity of the income elasticity of child labour has been at the centre of the debate regarding both its causes and the policy instruments to address it. We contribute to this debate providing theoretical and empirical novel results. From a theoretical point of view, for any given transfer size, there is a critical level of household income below which an increase in income has no impact on child labour and education. We estimate the causal impact of an increase in income on child labour and education exploiting the random allocation of the Child Grant Programme, an unconditional cash transfer, in Lesotho. We show that the poorest households do not increase investment in children’s human capital, while relatively less poor households reduce child labour and increase education. In policy terms, the results indicate that cash transfers might not be always effective to support the investment in children’s human capital of the poorest households. Beside the integration with other measures, making the amount of transfer depends of the level of deprivation of the household, might improve cash transfer effectiveness.
    Keywords: child labour, education, cash transfer, randomized experiment, Lesotho
    JEL: H C93 I28 J1 J24
    Date: 2019–08–01
  4. By: Yuko Nakano; Eustadius F.Magezi
    Abstract: This paper examines the impact of microcredit on the adoption of technology and productivity of rice cultivation in Tanzania. Collaboratively with BRAC, a globally-known microfinance institution, we offered microcredit specifically designed for agriculture to randomly selected farmers. We estimate the intention-to-treat effect (ITT) as well as the local average treatment effect (LATE) of microcredit, by using the eligibility to the program as an instrumental variable (IV). Overall, we find statistically weak or even null evidence that the BRAC program increases the use of chemical fertilizer. Also, credit use does not result in an increase in paddy yield, profit from rice cultivation, or household income for borrowers. Our results from sub-sample analyses suggest that credit does not increase the fertilizer use by those who have better access to irrigation water as they have already applied the amount of fertilizer near to the recommended level. On the other hand, credit increases the fertilizer use by those who have limited access to irrigation water and have previously used little fertilizer. However, possibly due to the poor yield response to fertilizer, the increase in chemical fertilizer use does not result in higher yield for them. We also observed similar phenomenon for the comparison between trained and non-trained borrowers before the intervention.
    Keywords: Microcredit, Technology Adoption, Agriculture, Tanzania, Africa
    Date: 2019–06
  5. By: Franses, Ph.H.B.F.
    Abstract: This paper examines economic growth in 52 African countries for 1961-2016 and seeks to find if there is common growth. As all African countries have their particular features, concerning climate, harvest, industry, size, politics, and infrastructure, and more, it seems best to rely on a non-parametric method. Dynamic Time Warping is such a convenient method, also as it allows leads and lags across countries to vary over time, and as it can easily be incorporated into a clustering technique. Five clusters are found, two of which concern Equatorial Guinea and Botswana, and the three other clusters have common growth rates of about 0, 2 and 4 over more than five decades.
    Keywords: Economic growth, Africa, Non-parametric method, Dynamic Time Warping, Clusters
    JEL: C14 E32 N17
    Date: 2019–07–31
  6. By: Sami Bensassi (University of Birmingham); Joachim Jarreau (PSL Université Paris-Dauphine, PSL Research University, IRD, LEDa, DIAL, Paris, France.)
    Abstract: What factors explain the persistence and pervasiveness of corruption in certain parts of the world? In West Africa, many day-to-day transactions require the payment of bribes. Quantitative evidence on these bribes and their determinants is scarce. This paper sheds light on the level and the frequency of bribe payments in informal cross-border trade. It examines how bribes depend on the trade regime and on market structure. We rely on data from a survey of traders in Benin to estimate the determinants of bribe payments. We exploit variations in the trade regime across Benin's borders, as well as changes in trade restrictions over time and variations in route availability across space and time. We nd that reductions in trade barriers help to lower bribes, but do not eliminate them, with bribes remaining frequent in liberalized trade regimes. These results suggest that collusive corruption - used to circumvent regulations and taxes - coexists with coercive corruption, where ocials use their monopoly power to extract transfers from traders.
    Keywords: Informal trade, corruption, trade policy.
    JEL: O17 F14 F15
    Date: 2019–06
  7. By: Donaubauer, Julian; Kannen, Peter; Steglich, Frauke
    Abstract: Inspired by a recent and ongoing debate about whether foreign direct investment (FDI) represents a blessing for or an impediment to economic, social, and political development in FDI host countries this paper addresses two issues: Does the presence of foreign investors impact the occurrence of petty corruption? If so, what are the main underlying mechanisms? Geocoding an original firm-level dataset and combining it with georeferenced household survey data, this is a first attempt to analyze whether the presence of foreign investors is associated with changes in local corruption around foreign-owned production facilities in 19 Sub-Saharan African countries. Applying an estimation strategy that explores the spatial and temporal variation in the data, we find strong and consistent evidence that the presence of foreign firms increases bribery among people living nearby. When examining two potential channels, we find no support that FDI-induced economic activity leads to more corruption. In contrast, the results provide evidence that FDI affects corruption via norm transmission.
    Keywords: FDI,corruption,georeferenced data,Sub-Saharan Africa
    JEL: D1 F21 F23 O12
    Date: 2019
  8. By: Frederic Lambert; Hyunmin Park
    Abstract: We analyze microdata from Mexico's survey on household income and expenditures (ENIGH) to study the evolution of income inequality in Mexico over 2004-16, identify its sources, and investigate how it was affected by government social policy. We find evidence of only a small decline in inequality over this period. The observed decline may be attributed to government transfers, notably targeted cash transfers (Prospera) and non-contributory pensions. In 2016, those two programs accounted for more than two thirds of the reduction in the Gini coefficient due to government transfers. Other transfer programs such as farmland subsidies (Proagro), government scholarships, and non-monetary transfers for medical expenditures have not been as effective.
    Date: 2019–07–11
  9. By: José Espinoza-Delgado (University of Goettingen / Germany); Jacques Silber (Bar-Ilan Univesity, Ramat-Gan / Israel)
    Abstract: The Alkire and Foster (2011) methodology, as the mainstream approach to the measurement of multi-dimensional poverty in the developing world, is insensitive to inequality among the multidimensionally poor individuals and does not consider simultaneously the concepts of efficiency and distributive justice. Moreover, the vast majority of empirical indices of multi-dimensional poverty in the literature overlook intra-household inequalities, an issue that is crucial to a better understanding of gender inequalities, because they equate the poverty status of the household with the poverty status of all individuals in the household. Consequently, using the general framework proposed by Silber and Yalonetzky (2013) and Rippin’s ideas on multi-dimensional poverty measurement (2013, 2017), we propose in this paper to depart somehow from the mainstream approach and take an individual-based and inequality sensitive view of multi-dimensional poverty when only ordinal (dichotomized) variables are available. We use such an approach to estimate multi-dimensional poverty among individuals aged 18 and 59 years living in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica, shedding thus some light on gender differences in poverty and inequality in those countries. Overall, we find that individuals living in Guatemala have the highest probability of being multidimensionally poor, followed by the ones from Nicaragua; people living in Costa Rica, by contrast, have by far the lowest probability of being poor. In the middle appears Honduras and El Salvador, Hondurans having a larger probability of being multi-dimensionally poor than the Salvadorians. Regarding the gender gaps, the overall estimates suggest that the incidence and the intensity of multidimensional poverty in Central America are higher among females; inequality, however, is somewhat higher among males.
    Keywords: multi-dimensional poverty measurement, inequality, gender inequality, Latin America, Central America
    JEL: I3 I32 D1 D13 D6 D63 O5 O54
    Date: 2018–09–27
  10. By: Olga Namen; Mounu Prem; Juan F. Vargas
    Abstract: A large body of literature has documented negative effects of civil conflict on the educational outcomes of affected children across different countries and historical periods. The opposite is however not obvious. Because conflict can damage educational infrastructure, and violence reductions attract economic activity and thus increase the opportunity cost of schooling, it may take a long time for conflict-affected societies to offset the loss in human capital after violence is over. In this paper we study the effect of Colombia’s recent efforts to end the conflict with the FARC insurgency on short-term school dropout rates. Using a difference-in-differences identification strategy, we find that the permanent ceasefire declared by FARC during peace negotiations with the government induced a large differential reduction on school dropout rates in the areas most affected by FARC violence prior to the ceasefire, relative to other areas. We show that these results are mainly not driven by the recruitment of children during conflict. Rather, our evidence suggests that most the reduction in school dropout is incentivized by a decrease in the overall victimization in areas that experienced FARC violence. Moreover, the effect of the ceasefire on dropout rates is attenuated by the contemporaneous increase in coca growing in former FARC-affected regions.
    Keywords: Education, School dropout, Peace process, Armed conflict
    JEL: D74 I21 J24
    Date: 2019–08–01
  11. By: Domenico Rossignoli; Sara Balestri; Simona Beretta; Mario A. Maggioni
    Abstract: This paper provides new evidence on the effect of an International Child Support (ICS) program, implemented in ten primary schools located in the outskirts of Goma (Congo, DR), on school performances. Using original micro data in a sample of 309 children (121 treated and 188 control), we explore whether the ICS program impacts on a broad set of alternative educational outcomes - namely, performance scores in 4 different subjects (plus total score), failure rates and school drop-out rates - through a Difference-in-Differences approach. The results show that sponsored children report lower drop-out rates and failure rates with respect to their control peers and, while lagging behind before the program started, in two school years they catch-up in all subjects. Results are robust to the implementation of Coarsened Exact Matching that exploits the structure of the data to produce unbiased estimates along with bounded ex-post balancing.
    JEL: C93 D04 I25
    Date: 2019
  12. By: Adriana D. Kugler
    Abstract: This paper documents recent labor market performance in the Latin American region. The paper shows that unemployment, informality, and inequality have been falling over the past two decades, though still remain high. By contrast, productivity has remained stubbornly low. The paper, then, turns to the potential impacts of various labor market institutions, including employment protection legislation (EPL), minimum wages (MW), payroll taxes, unemployment insurance (UI) and collective bargaining, as well as the impacts of demographic changes on labor market performance. The paper relies on evidence from carefully conducted studies based on micro-data for countries in the region and for other countries with similar income levels to draw conclusions on the impact of labor market institutions and demographic factors on unemployment, informality, inequality and productivity. The decreases in unemployment and informality can be partly explained by the reduced strictness of EPL and payroll taxes, but also by the increased shares of more educated and older workers. By contrast, the fall in inequality starting in 2002 can be explained by a combination of binding MW throughout most of the region and, to a lesser extent, by the introduction of UI systems in some countries and the role of unions in countries with moderate unionization rates. Falling inequality can also be explained by the fall in the returns to skill associated with increased share of more educated and older workers.
    Date: 2019–07–17
  13. By: Eger, Jens; Öhler, Hannes; Rudolph, Alexandra
    Abstract: The paper focuses on an important dimension of donor aid allocation, which has largely been neglected in the empirical literature: the need orientation of donors when deciding on the sectoral composition of their recipient country portfolios. Employing sector-specific need indicators in logit and zero-one inflated beta estimations our results show that the degree of need orientation of donors depends on the sector. While in the sectors of governance, transport, environment protection, sexually transmitted diseases control including HIV/AIDS and emergency response, the analysis clearly points to a need-based allocation of resources, it is striking that need considerations seem not to play a role in the health and water and sanitation sectors. Remarkably, we find evidence for donor coordination within countries, in that donors took other donors’ sector activities into account when deciding on the sectoral composition of their country portfolios.
    Keywords: Wirksamkeit und Evaluierung
    Date: 2018
  14. By: Wiktoria Tafesse (Centre for Health Economics, University of York, York, UK); Gerald Manthalu (Ministry of Health, Government of Malawi); Martin Chalkley (Centre for Health Economics, University of York, York, UK)
    Abstract: We study the impact of contracting-out of maternal health care by the government of Malawi to providers from the Christian Health Association of Malawi (CHAM) in the form of Service Level Agreements (SLAs). Under a SLA, a CHAM facility provides agreed maternal and newborn services free-of-charge to patients, and is reimbursed on a fixed price per service. We merge data on health facilities in Malawi with pregnancy histories from the 2010 Malawi Demographic and Health Survey, and exploit the staggered implementation of SLAs across facilities. Using difference-in-differences, we estimate the differential effects on pregnancy- related health care utilisation to mothers residing near and far from facilities with a SLA over time. Our findings show that SLAs reduced home births and increased skilled deliveries at CHAM hospitals. We observe greater provision of prenatal care services at CHAM health centres but no overall increase in the number of prenatal care visits. We find evidence of a reduction in certain components of prenatal care.
    Keywords: Healthcare, Least Developed Country, Contracting Out, Nonprofit.
    JEL: I11 I12 I15 I18 L24 L30 L33
    Date: 2019–07
  15. By: Hidetaka Nishizawa; Scott Roger; Huan Zhang
    Abstract: Pacific island countries (PICs) are vulnerable severe natural disasters, especially cyclones, inflicting large losses on their economies. In the aftermath of disasters, PIC governments face revenue losses and spending pressures to address post-disaster relief and recovery efforts. This paper estimates the effects of severe natural disasters on fiscal revenues and expenditure in PICs. These are combined with information on the frequency of large disasters to calculate the rate of budgetary savings needed to build appropriate fiscal buffers. Fiscal buffers provide self-insurance against natural disaster shocks and facilitate quick disbursement for recovery and relief efforts, and protection of spending on essential services and infrastructure. The estimates can provide a benchmark for policymakers, and should be adjusted to take into account other sources of financing, as well as budget risks from less severe as well as more frequent disasters.
    Date: 2019–07–12

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