nep-dev New Economics Papers
on Development
Issue of 2019‒09‒02
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Born in the Right Place? Health Ministers, Foreign Aid and Infant Mortality By Widmer, Philine; Zurlinden, Noémie
  2. Parental Beliefs, Investments, and Child Development: Evidence from a Large-Scale Experiment By Pedro Carneiro; Emanuela Galasso; Italo Lopez Garcia; Paula Bedregal; Miguel Cordero
  3. The effectiveness of interventions to reduce informality in low- and middle income countries By Jessen, Jonas; Kluve, Jochen
  4. Giant Oil Discoveries and Conflicts By Carolyn Chisadza; Matthew Clance; Rangan Gupta; Mark E. Wohar
  5. No evidence of an oil curse: Natural resource abundance, capital formation and productivity By Al Raee, Mueid; De Crombrugghe, Denis; Ritzen, Jo
  6. Valuing meteorological services in resource-constrained settings: Application to smallholder farmers in the Peruvian Altiplano By Alexandra Brausmann; Moritz Flubacher; Filippo Lechthaler
  7. The Effects of Access to Credit on Productivity: Separating Technological Changes from Changes in Technical Efficiency By Nusrat Abedin Jimi; Plamen Nikolov; Mohammad Abdul Malek; Subal Kumbhakar
  8. Does Trade Liberalization Foster Intimate Partner Violence? By Alberto Chong; Daniel Velásquez
  9. Determinants of Mobile Broadband Use in Developing Economies: Evidence from Nigeria By Hasbi, Maude; Dubus, Antoine
  10. Son preference and child under nutrition in the Arab countries: is there a gender bias against girls? By Mesbah Sharaf; Ahmed Rashad; El-Hussien Ibrahim Mansour
  11. Does Social Conflict in Rural Regions Decrease Firm Ownership? Evidence from the Mining Sector in Latin America By Alberto Chong; Paul Haslam
  12. Farmers, Traders, and Processors: Estimating the Welfare Loss from Double Marginalization for the Indonesian Rubber Sector By Kopp, Thomas; Sexton, Richard J.

  1. By: Widmer, Philine; Zurlinden, Noémie
    Abstract: To determine whether health ministers engage in regional favoritism, we hand-collect geocoded data on the birth regions of cabinet members in 45 African countries between 2001 and 2014. We combine this data with information on World Bank health aid projects and retrospective data on neonatal and infant mortality from Demographic and Health Surveys. We provide two pieces of evidence suggesting health ministers engage in favoritism. First, using administrative region and country-year fixed effects, we show that administrative regions receive more health aid when a region-born health minister is in office. Second, comparing siblings, we find that neonates (and possibly infants) born in the same region as the health minister are less likely to die. These two results imply that not only do country leaders exercise their power to influence the allocation of funds (as shown in previous literature), but so do cabinet members. We do not find any descriptive evidence that the lower neonatal (and possibly infant) mortality in health ministers' birth regions can be explained by the additional health aid allocated to these regions.
    Keywords: Foreign aid, favoritism, political capture, patronage, clientelism, corruption, aid allocation, Africa, World Bank, infant mortality, child health, georeferenced data, spatial analysis
    JEL: D73 F35 I10 J13 I18 R11
    Date: 2019–08
  2. By: Pedro Carneiro; Emanuela Galasso; Italo Lopez Garcia; Paula Bedregal; Miguel Cordero
    Abstract: This paper experimentally estimates medium term impacts of a large-scale and low-cost parenting program targeting poor families in Chile. Households in 162 public health centers were randomly assigned to three groups: a control group, a second group that was offered eight weekly group parenting sessions, and a third group that was offered the same eight group sessions plus two sessions of guided interactions between parents and children focused on responsive play and dialogic reading. In spite of its short duration and intensity, three years after the end of the intervention, the receptive vocabulary and the socio-emotional development of children of families participating in either of the treatment arms improved (by 0.43 and 0.54 standard deviation, respectively) relative to children of nonparticipating families. The treatments also led to improvements in home environments and parenting behaviors of comparable magnitudes, which far outlasted the short duration of the intervention.
    Keywords: parenting, early childhood development
    JEL: H43 I10 I20 I38
    Date: 2019–08
  3. By: Jessen, Jonas; Kluve, Jochen
    Abstract: Labor markets in low- and middle income countries are characterized by high levels of informality. A multitude of interventions have therefore been implemented in many countries with the objective to increase the formalization of firms and workers, including information campaigns, simplification of registration procedures, reductions of payroll taxes and social security contributions, and interventions that enforce labor or business formalization. In this paper, we compile a database of 157 impact estimates from 32 academic studies that evaluate empirically one or more of these formalization interventions. The empirical analysis correlates the impact estimates of the primary studies - given as either (i) a measure of sign and statistical significance or (ii) the effect size - with explanatory factors such as the intervention type, the outcome variable, the scope of the intervention (program or policy), and other covariates. Several key findings emerge: first, the intervention type is not a strong determinant for the effectiveness of formalization interventions, though tax incentives and labor inspection are most likely to display significant positive effects. Second, the outcome "worker registration" shows significantly better results than other outcomes. Third, interventions at scale - i.e. formalization "policies" - are more effective on average than singular "programs".
    Keywords: formalization,labor registration,business registration,impact evaluation
    JEL: C40 J08 J48
    Date: 2019
  4. By: Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Mark E. Wohar (College of Business Administration, University of Nebraska; USA. School of Business and Economics, Loughborough University, Leicestershire, LE11 3TU, UK)
    Abstract: This study investigates the impact of oil discoveries on conflict. We argue that rents from resources are only part of the resource curse story, with discoveries of natural resources being just as prominent. Using a new measure for oil discoveries for a global panel of countries between 1960 and 2012, we find a positive correlation between oil discoveries and conflict, controlling for regional effects and other conflict determinants. Further analysis by type of conflict reveals that the discovery of oil deposits increases intrastate conflict in relation to interstate conflict, more so ethnic violence within countries. These effects are evident within a year of discovering the oil, and are persistent for over ten years after the discovery. The results also indicate that North Africa and Middle East countries are the most affected by oil discoveries in relation to other global regions. We find similar positive effects on conflict with quantity of oil discovered, as well as the expectation of oil discoveries. Interestingly, while institutions have a significant non-linear effect on conflict, they appear to have no significant mitigating effect when interacted with oil discoveries. The implication of this result may allude to countries with natural resources needing more transparent institutions to alleviate the resource curse. Overall, we believe the results from this study will provide some further understanding to the complex nature involving natural resources and incidences of conflict.
    Keywords: panel data, conflict, natural resources
    JEL: C23 O13 O50 Q34
    Date: 2019–08
  5. By: Al Raee, Mueid (UNU-MERIT); De Crombrugghe, Denis (SBE, Maastricht University); Ritzen, Jo (UNU-MERIT, Maastricht University)
    Abstract: This chapter examines the relationship between labour productivity, capital formation, and natural resource extraction in countries with natural resource reserves. We develop a theoretical two-sector model for a closed economy that maximises consumption over time, and examine how the control variables - natural resource extraction and the savings rate - determine fixed capital investment. We find that in a closed economy, the overall labour productivity is a positive function of capital investment per labour. That is in turn related to the externally given natural resource price, natural resource reserves and the resource extraction ratio. High natural resource prices and extraction rates provide opportunities to increase the overall investment in fixed capital and thus boost the labour productivity. We empirically test this model for oil as a natural resource. The data covers 36 years from 1980 to 2015 and includes 149 countries. 85 of these countries possessed commercially recoverable oil reserves in at least a part of the time period covered. We are able to exploit the panel and carry out the estimation using two-way fixed effects. We observe that oil price has an overall positive impact on labour productivity growth in the modern sector. The savings rate and schooling are positively correlated to labour productivity growth as well as fixed capital formation per capita. We find that the oil sector variables - oil reserves and oil extraction ratio - do not contribute to labour productivity growth directly, rather through increased capital formation per capita.
    Keywords: structural change, natural resource curse, GCC, theoretical modelling, empirical application, capital formation
    JEL: E21 E24 O13 O47 Q32
    Date: 2019–07–01
  6. By: Alexandra Brausmann (ETH Zurich, Switzerland); Moritz Flubacher (Federal Office of Meteorology and Climatology MeteoSwiss, Switzerland); Filippo Lechthaler (ETH Zurich, Switzerland)
    Abstract: Changing climate and weather patterns have resulted in reduced agricultural productivity in some parts of the world and put pressure on global food security. Availability and improved quality of meteorological information is seen as a potentially propitious means of adaptation to changing climate conditions. Forecasts of extreme weather events are especially valuable in resource-poor settings where climate-related vulnerability is high, such as for smallholder farmers in the developing world. In this paper we provide estimates of frost warnings valuation in the context of small-scale quinoa production in the Peruvian Altiplano. We first present a detailed contextual assessment of quinoa production in the study region based on agrometeorological and socio-economic data that was obtained through a representative farm household survey conducted in December 2016. Building on this assessment, we propose a stochastic life-cycle model, replicating the lifetime cycle of a quinoa-producing household, in order to derive a theoretical valuation of frost warnings. Calibrating the model to our data we provide estimates of potential frost-warning valuation which are in the range of $30-50 per household and year, depending on the forecast accuracy and agents' risk aversion. In a last step, using the observational data from the farm household survey, we show that access to existing meteorological services is empirically associated with avoided losses in agricultural production that amount to $18 per average household and per year. Our findings point to high climate vulnerabilities of smallholders in the Peruvian Altiplano and potentially large welfare gains from incorporating improved meteorological services into their decision-making process.
    Keywords: Valuation, meteorological information, uncertainty, agriculture, quinoa farming, climate change
    JEL: C25 D81 H41 O13 Q12 Q16 Q51
    Date: 2019–08
  7. By: Nusrat Abedin Jimi; Plamen Nikolov; Mohammad Abdul Malek; Subal Kumbhakar
    Abstract: Improving productivity among microenterprises is important, especially in low-income countries where market imperfections are pervasive, and resources are scarce. Relaxing credit constraints can increase the productivity of microenterprises. Using a field experiment involving agricultural microenterprises in Bangladesh, we estimated the impact of access to credit on the overall productivity of rice farmers and disentangled the total effect into technological change (frontier shift) and technical efficiency changes. We found that relative to the baseline rice output per decimal, access to credit resulted in, on average, approximately a 14 percent increase in yield, holding all other inputs constant. After decomposing the total effect into the frontier shift and efficiency improvement, we found that, on average, around 11 percent of the increase in output came from changes in technology, or frontier shift, while the remaining 3 percent was attributed to improvements in technical efficiency. The efficiency gain was higher for modern hybrid rice varieties, and almost zero for traditional rice varieties. Within the treatment group, the effect was greater among pure tenant and mixed-tenant microenterprise households compared with microenterprises that only cultivated their own land.
    Keywords: field experiment, microfinance, credit, Efficiency, productivity, farmers, South Asia
    JEL: E22 D20 H81 O12 O16 Q12
    Date: 2019–08
  8. By: Alberto Chong (Department of Economics, Georgia State University, USA); Daniel Velásquez (Department of Economics, University of Michigan, USA)
    Abstract: By exploiting an unexpected policy change in the form of drastic tariffs reduction across several industries in Peru during the 2000s we are able to causally show that in districts where industries’ employment are predominantly male, trade liberalization produced an increase in physical intimate partner violence of 36 percentage points with respect to control districts in our preferred specification. We find no such difference in districts where industries’ employment is predominantly female. These findings are original and consistent with several hypotheses in the social sciences. Our results are robust to falsification and placebo tests, sensitivity to initial conditions, conflation of past and current shocks, selective migration, permutation tests and input-tariffs considerations. Finally, we find considerable heterogeneity, as education and the age of first marriage appear to be key variables that correlate with our findings.
    Date: 2019–08
  9. By: Hasbi, Maude; Dubus, Antoine
    Abstract: Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we analyse what are the determinants of mobile broadband adoption in developing economies. We provide empirical evidence on the presence of a learning effect stemming from mobile money use, which by providing a higher experience in using mobile phone increases mobile broadband use. The ownership of a mobile phone is also positively correlated with mobile broadband use. However, for those not owning a mobile phone the ownership of an active SIM card is a prerequisite for using mobile broadband. We highlight that the population left behind is mainly composed of poor households living in rural areas.
    Keywords: Mobile Broadband Use,Developing Economy,Inequality,Economic Growth
    JEL: I30 O12 L50 L96 O55
    Date: 2019
  10. By: Mesbah Sharaf (Department of Economics, University of Alberta); Ahmed Rashad (Economic Studies and Policies Sector, Government of Dubai); El-Hussien Ibrahim Mansour (New York City College of Technology CUNY, USA)
    Abstract: Although son preference has been demonstrated in the MENA region with different manifestations and at several phases of human development, the literature remains sparse with studies that examined the early childhood phase. The current study aims to explore the presence of a gender bias in child nutrition status and its association with maternal son preference in three Arab countries; namely, Egypt, Jordan, and Yemen on which limited research has been conducted. Child nutritional status is measured using the Height-for-Age z-score (HAZ). To examine the presence of gender bias across the entire nutritional distribution, we utilized a quantile regression framework which characterize the heterogeneous association of each determinant across the different percentiles of the nutrition distribution. We use data from the most recent rounds of the Demographic and Health Survey on a nationally representative sample of children aged 0-4 years, for which we observe their health measures. The multivariate analyses include a set of HAZ determinants that are widely used in the literature. Descriptive statistics show that 21.5% of the mothers have son preference in Yemen compared to 19.10% in Jordan and 13.26% in Egypt. Results of the baseline OLS model demonstrate a robust pro-girl nutrition bias in the three countries. However, results of the quantile regression model show that this pro-girl nutrition bias is only prevalent at the lower segment of the conditional HAZ distribution for Jordan and Yemen and is prevalent across the whole conditional HAZ distribution for Egypt. We also find no statistically significant association between maternal son preference and gender bias in child nutrition in the three countries. Although son preference is manifested in several phases of human development in the MENA region, the current study finds no nutritional bias against girls in the examined countries at early childhood.
    Date: 2019–08–21
  11. By: Alberto Chong (Department of Economics, Georgia State University, USA); Paul Haslam (University of Ottawa, Canada)
    Abstract: Using firm-level data for five countries in Latin America, we find a negative and statistically significant link between social conflict in rural areas and ownership of mines. We apply an instrumental variables approach and find that this link may be causal. The instrument employed is altitude of the mine location—which we claim is uncorrelated with the dependent variable, firm ownership—but is correlated with social conflict. This variable serves as an ideal instrument, as it complies with the exclusion restriction. Our results hold to a formal test of changes in specification.
    Date: 2019–08
  12. By: Kopp, Thomas; Sexton, Richard J.
    Abstract: Reducing buyer market power over agricultural suppliers is a key strategy to improve rural livelihoods in emerging economies. This paper focuses on implications of failure of a supply chain to coordinate vertically for farm incomes, with specific application to the Indonesian rubber industry. In the Jambi province production is mainly in the hands of smallholder farmers, who sell via spot transactions to a network of traders who in turn sell in spot exchanges to rubber processors. Processing is highly concentrated, and, whereas there are large numbers of rubber traders, evidence indicates that both traders and processors exercise oligopsony power, a classic problem of double marginalization. We estimate the extent of buyer market power in farmer-trader and trader-processor interactions and derive the welfare loss from double marginalization. We then explore the nature of this market failure and quantify the extent of welfare loss and redistribution away from farmers. We conclude by asking why the market has not addressed this failure through improved vertical coordination in the supply chain and discussing policy innovations to facilitate better coordination.
    Keywords: Industrial Organization, International Development
    Date: 2019–08–28

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