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

  1. Ideas, Networks and Jobs: Rebasing Growth In The Middle East And North Africa By Paul Collier
  2. Do Constraints on Women Worsen Child Deprivations?Framework, Measurement, and Evidence from India By Stephen Smith; Alberto Posso; Lucia Ferrone
  3. Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia By Gaurav Khanna; Carlos Medina; Anant Nyshadham,; Jorge Tamayo
  4. Drug Money and Bank Lending: The Unintended Consequences of Anti-Money Laundering Policies By Tomas Williams; Pablo Slutzky; Mauricio Villamizar-Villegas
  5. Returns to farm child labor in Tanzania By André, Pierre; Delesalle, Esther; Dumas, Christelle
  6. Reexamining the growth effects of ENSO: the role of local weather conditions By Cécile Couharde; Rémi Generoso; Olivier Damette; Kamiar Mohaddes
  7. Agricultural extension, intra-household allocation and malaria By Yao Pan; Saurabh Singhal
  8. Violent Conflict Exposure in Nigeria and Economic Welfare By Chiwuzulum Odozi, John; Uwaifo Oyelere, Ruth
  9. Those Who Can't Sort, Steal: Caste, Occupational Mobility, and Rent-Seeking in Rural India By Lawson, Nicholas; Spears, Dean
  10. Health consequences of sterilizations By De La Rupelle, Maëlys; Dumas, Christelle

  1. By: Paul Collier (Department of Economics and Public Policy Blavatnik School of Government, University of Oxford)
    Abstract: Oil rents are set to wane. In the MENA Region, the legacy of four decades of dependence on oil is an economy that is not generating enough opportunities for productive employment. This paper set out a policy agenda for gradual change that is cumulatively transformative. Directly, productivity can be increased by encouraging clusters of firms capable of innovation, linked to vocational training that equips a workforce with the skills that firms need. But the socio-political transformation from a rent-seeking economy to a skill-based economy is more complex, requiring both cultural and institutional change. This cannot be planned in detail: a transformation is a unique event subject to radical uncertainty. It calls for a process of rapid social learning based on experimentation. As the society adapts, new opportunities open, and the next steps clarify. I give examples of how an adaptable framework has been built elsewhere.
    Date: 2019–08–21
  2. By: Stephen Smith (George Washington University); Alberto Posso (RMIT University); Lucia Ferrone (UNICEF Office of Research-Innocenti)
    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 physical 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. Our preferred specification follows Lewbel, constructing internal heteroskedasticity-based instruments; and we 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. Specifically, our causal analysis uncovers a robust impact of women experiencing constraints in emotional abuse, restrictions on the use of household earnings, and freedom of movement to access health facilities, on child deprivation. We conclude that societal changes that relax constraints on women may have potential complementary benefits for their children. We recommend that analyses showing welfare gains of relaxing constraints on women account for potential additional intra-household benefits, examining other channels through which they operate.
    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
  3. By: Gaurav Khanna (University of California San Diego); Carlos Medina (Banco de la Republica de Colombia); Anant Nyshadham, (Boston College & NBER); Jorge Tamayo (Harvard University. Harvard Business School,)
    Abstract: Canonical models of crime emphasize economic incentives. Yet, causal evidence of sorting into criminal occupations in response to individual-level variation in incentives is limited. We link administrative socioeconomic microdata with the universe of arrests in Medellίn over a decade. We exploit exogenous variation in formal-sector employment around a socioeconomic-score cutoff, below which individuals receive benefits if not formally employed, to test whether a higher cost to formal-sector employment induces crime. Regression discontinuity estimates show this policy generated reductions in formal-sector employment and a corresponding spike in organized crime, but no effects on crimes of impulse or opportunity.
    Keywords: Colombia; organized crime, informality, occupational choice, gangs, Medellίn
    JEL: K42 J24
    Date: 2019–08
  4. By: Tomas Williams (George Washington University); Pablo Slutzky (University of Maryland); Mauricio Villamizar-Villegas (Central Bank of Colombia)
    Abstract: CWe explore the unintended consequences of anti-money laundering (AML) policies. For identification, we exploit the implementation of the SARLAFT system in Colombia in 2008, aimed at controlling the flow of money from drug trafficking into the financial system. We find that bank deposits in municipalities with high drug trafficking activity decline after the implementation of the new AML policy. More importantly, this negative liquidity shock has consequences for credit in municipalities with little or nil drug trafficking. Banks that source their deposits from areas with high drug trafficking activity cut lending relative to banks that source their deposits from other areas. We show that this credit shortfall negatively impacted the real economy. Using a proprietary database containing data on bank-firm credit relationships, we show that small firms that rely on credit from affected banks experience a negative shock to investment, sales, size, and profitability. Additionally, we observe a reduction in employment in small firms. Our results suggest that the implementation of the AML policy had a negative effect on the real economy.
    Keywords: money laundering; organized crime; financial system; bank lending; liquidity; economic growth
    JEL: I15 O15 Q12
    Date: 2019–05
  5. By: André, Pierre; Delesalle, Esther; Dumas, Christelle
    Abstract: In developing countries, the opportunity costs of children’s time can significantly hinder universal education. This paper studies one of these opportunity costs: we estimate the agricultural productivity of children aged 10 to 15 years old using the LSMS-ISA panel survey in Tanzania. Since child labor can be endogenous, we exploit the panel structure of the data and instrument child labor with changes in the age composition of the household. One day of child work leads to an increase in production value by roughly US$0.89. Children enrolled in school work 26 fewer days than nonenrolled children. Compensating enrolled children for loss in income can be accomplished with monthly payments of $1.92. However, a complete simulation of a hypothetical conditional cash transfer shows that even $10/month transfers would fail to achieve universal school enrollment of children aged 10 to 15 years old.
    Keywords: Child labor; Human capital investment; Conditional cash transfer; Farm household; Production function; Tanzania
    JEL: D1 O1 J3
    Date: 2019–04–05
  6. By: Cécile Couharde; Rémi Generoso; Olivier Damette; Kamiar Mohaddes
    Abstract: This paper examines the growth effects of ENSO events through their interactions with local weather conditions using the Standardized Precipitation and Evapotranspiration Index (SPEI) from 1975 to 2014 and over a sample of 74 countries. The inclusion of SPEI in panel estimation makes it possible to control for time-varying country-specific effects of ENSO events, therefore outlining their heterogeneous effects on growth and eliminating a potential source of omitted variable bias. By better identifying the persistence of ENSO effects on local weather conditions, we evidence that ENSO events generate heterogeneous and local effects depending not only on countries' climate regime but also on their weather patterns. Our results suggest that examining the growth effects of ENSO events should thus explicitly account for their interaction with weather patterns to capture more precisely the heterogeneity across countries.
    Keywords: Economic growth, ENSO events, Weather conditions
    JEL: O44 Q54 R11
    Date: 2019
  7. By: Yao Pan (Aalto University); Saurabh Singhal (Lancaster University)
    Abstract: Can agricultural development programs improve health-related outcomes? We exploit a spatial discontinuity in the coverage of a large-scale agricultural extension program in Uganda to causally identify its effects on malaria. We find that eligibility for the program reduced the proportion of household members with malaria by 8.9 percentage points, with children and pregnant women experiencing substantial improvements. An examination of the underlying mechanisms indicates that an increase in income and the resulting increase in the ownership and usage of bednets may have played a role. Taken together, these results signify the importance of financial constraints in investments for malaria prevention and the potential role that agricultural development can play in easing it.
    Keywords: Malaria, Intra-household Allocation, Agricultural Extension, Regression Discontinuity, Uganda
    JEL: I15 I12 D13 O12 Q16
    Date: 2019–04
  8. By: Chiwuzulum Odozi, John (University of Ibadan, Nigeria); Uwaifo Oyelere, Ruth (Agnes Scott College)
    Abstract: Several papers have attempted to estimate and document the impact of conflict on several education, health and socioeconomic outcomes. One lesson from the past research is the heterogeneity in the effect of violent conflict across and within countries. In this paper we attempt to estimate the casual impact of conflict in Nigeria on welfare related outcomes. The 2009 insurgence of Boko Haram and the Fulani herdsmen versus farmers conflicts have led to a significant increase in violent conflict in the North Eastern and Central parts of Nigeria. However, bouts of violent conflict have existed in different communities across the country since independence. We estimate the average effect of violent conflict exposure on welfare, across Nigeria using the three waves of the Nigerian General Household Survey (GHS) panel combined with The Armed Conflict Location & Event Data (ACLED). Employing a fixed effect approach, our results suggest that recent and long term exposure to conflict increased the incidence, intensity and severity of poverty in Nigeria. In addition we find that exposure to violent conflict also decreased household income.
    Keywords: violence, Nigeria, conflict, Boko Haram, economic welfare, poverty
    JEL: I10 I30 O1 D74
    Date: 2019–08
  9. By: Lawson, Nicholas (Princeton University); Spears, Dean (University of Texas at Austin)
    Abstract: Three important features of Indian labor markets enduringly coexist: rent-seeking, occupational immobility, and caste. These facts are puzzling, given theories that predict static, equilibrium social inequality without conflict. Our model explains these facts as an equilibrium outcome. Some people switch caste-associated occupations for an easier source of rents, rather than for productivity. This undermines trust between castes and shuts down occupational mobility, which further encourages rent-seeking due to an inability of workers to sort into occupations. We motivate our contribution with novel stylized facts exploiting a unique survey question on casteism in India, which we show is associated with rent-seeking.
    Keywords: caste, occupational mobility, rent-seeking, India, labour markets in developing countries
    JEL: O15 J71 J24 J47
    Date: 2019–08
  10. By: De La Rupelle, Maëlys; Dumas, Christelle
    Abstract: In India, as in many developing countries, female sterilization is the main contraceptive method: 37% of women older than 25 are sterilized. However, no economic study assesses the effect of sterilization, providing guidance on efficient reproductive health policies. We analyze the consequences of sterilization for maternal health, considering the endogeneity of the decision. We exploit that Indian households face different infant mortality risks -driven by malaria prevalence - and have a son preference. Sterilization increases when women have a boy first-born, but less so when they live in a malarious area, as they fear losing the boy; this situation provides an instrument. We show that sterilization strongly increases the prevalence of various symptoms in the reproductive sphere while also reducing the risk of anemia, likely from avoiding pregnancy. This paper is the first to assess the effect of a specific contraceptive method with a clear identification strategy.
    Keywords: Sterilization ; Fertility ; Health ; Gender ; Development
    JEL: I15 J13 O1 D1
    Date: 2019–09–02

This nep-dev issue is ©2019 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.