nep-dev New Economics Papers
on Development
Issue of 2020‒01‒13
eight papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Fear Not For Man? Armed conflict and social capital in Mali By Thomas Calvo; Emmanuelle Lavallée; Mireille Razafindrakoto; François Roubaud
  2. Microcredit RCTs in Development: Miracle or Mirage? By Florent Bédécarrats; Isabelle Guérin; François Roubaud
  3. Fair Trade and Wellbeing Improvements: Evidence from Sri Lanka By Hannah Holmes; Katsushi S. Imai
  4. Price discrimination in bribe payments: Evidence from informal cross-border trade in West Africa By Sami Bensassi; Joachim Jarreau
  5. Women in Bangladesh Labour Market: Determinants of Participation, Gender Wage Gap and Returns to Schooling By Mustafizur Rahman; Marzuka Md. Al-Hasan
  6. Livelihood Diversification Strategies: Resisting Vulnerability in Egypt By Helmy, Imane
  7. Inferring informal risk-sharing regimes: Evidence from rural Tanzania By Li, Zhimin; Ligon, Ethan
  8. Fairtrade, Agrochemical Input Use, and Effects on Human Health and the Environment By Sellare, Jorge; Meemken, Eva-Marie; Qaim, Matin

  1. By: Thomas Calvo (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université); Emmanuelle Lavallée (DIAL, LEDa, IRD, Université Paris-Dauphine, Université PSL); Mireille Razafindrakoto (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université); François Roubaud (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université)
    Abstract: This paper studies the effects of armed conflict on social capital in Mali, where a violent conflict has been raging since 2012. We examine the conflict's impacts on associational membership using event location data and unique survey data on governance, peace and security (GPS-SHaSA). We show that, in conflict-exposed areas, adult involvement in associations increases from 7 to 14 percentage points. Instrumental variable and difference-in-differences strategies complementary mitigate reverse causation and omitted variable biases as estimated results remain very consistent. Robust estimations constrained to non-migrants samples also rule out selection into migration. Yet this result, consistent with the argument that armed conflict cultivates social engagement, is not a positive outcome in the case of Mali. The increase is observed solely for family and political associations, which are comparatively inward-looking and act as interest groups. We interpret this finding as a form of withdrawal behind group or community boundaries, an interpretation supported by further analysis of interpersonal trust. This sort of withdrawal may exacerbate ethnic divisions and deepen the conflict.
    Keywords: Social capital; Con ict; Participation; Trust; Mali.
    JEL: D71 F51 O12 Z13
    Date: 2019–07
  2. By: Florent Bédécarrats (AFD Paris, France); Isabelle Guérin (IRD CESSMA); François Roubaud (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université)
    Abstract: Microcredit has long stood as a flagship topic for RCTs in development, starting with the publication of a special issue in a leading economics journal on six RCTs conducted in different world regions. This special issue was hailed as the first rigorous and conceivably definitive study on the impacts of microcredit. However, a detailed exploration of the implementation of these six RCTs reveals many limitations with respect to internal and external validity, ethics and interpretation. This paper uses analytical tools from statistics, political economy and development anthropology to discuss the extent to which the entire RCT chain strays from the ideal RCT principles (from sampling, data collection, data entry and recoding, estimates and interpretation to publication and dissemination of results). It also raises questions about the disparity between the academic and political success of this special issue and the many inconsistencies of method.
    Keywords: Randomized Control Trial (RCT), Microcredit, Developing countries, Internal validity, External validity, Statistics, Development anthropology, Political economy, Ethics.
    JEL: A11 A14 B41 C18 C93 N27 O16
    Date: 2019–12
  3. By: Hannah Holmes (Manchester Metropolitan University); Katsushi S. Imai (Department of Economics, The University of Manchester and Research Institute for Economics and Business Administration, Kobe University)
    Abstract: This paper investigates whether and how Fair Trade certification improves the wellbeing of small-scale producers by drawing upon a field study carried out by the authors in 2009 in the Central Province of Sri Lanka. A point of departure from earlier studies is to use a mixed methods approach, combining qualitative and quantitative data to assess the impact of Fair Trade on a broader set of development indicators to capture both the monetary and non-monetary progress of farmers. Methodologically, to overcome the limitation of small sample sizes of non-experimental survey data, we propose the use of propensity-score weighted linear and non-linear regression models with and without instrumenting the farmers' participation in Fair Trade. Here we have made treatment and control groups observationally comparable by applying propensity score matching (PSM) to match and weight the data, following Hirano and Imbens. We have found that Fair Trade certification increased farmers' actual income from tea production significantly, with fewer hours of work per day and accelerated perceived improvement in overall household income, as well as empowering women in decision making. Our mixed methods approach led us to conclude that Fair Trade certification benefits Fair Trade tea farmers through increased tea income and risk reduction.
    Keywords: Fair trade, Improved income, Wellbeing, Mixed methods, PSM, Probit, IV, Sri Lanka
    JEL: C21 C26 O13 Q17
    Date: 2019–12
  4. By: Sami Bensassi (Birmingham Business School - University of Birmingham [Birmingham]); Joachim Jarreau (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    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 coss-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 find 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 officials use their monopoly power to extract transfers from traders.
    Keywords: Informal trade,Corruption,Trade policy
    Date: 2019
  5. By: Mustafizur Rahman; Marzuka Md. Al-Hasan
    Abstract: This paper examines four issues concerning the labour market scenario in Bangladesh, from the particular perspective of female labour force participation: (a) trends and characteristics of female participation; (b) determinants of female labour force participation; (c) male–female wage gap and wage discrimination; and (d) returns to schooling for women. Mean wage decomposition analysis carried out by the authors shows that, on average, woman earns 12.2 per cent less than man, with about half the gap explained by labour market discrimination. Quantile counterfactual decomposition shows that women are subject to higher wage penalty at the lower deciles of the wage distribution. The paper finds that women’s returns to schooling tends to be underestimated, but average returns for female is found to be higher than that of male. The report recommends several strategies, based on findings of econometric analyses, to incentivise formalisation of female labour, reduce the wage gap and occupational segregation in the labour market and promote skill-endowed education for women in view of emerging labour market challenges in Bangladesh.
    Keywords: Labour Market, Gender Wage Gap, female labour, education, Bangladesh Labour Market
    Date: 2019–05
  6. By: Helmy, Imane
    Abstract: Livelihood diversification is attracting considerable interest as a tool to cope with economic shocks and resist vulnerability. This paper investigates the evolution of livelihood diversification in Egypt with a particular focus on wealth and urban-rural divides. Using Egypt Labor Market Panel data from 2006 to 2018, I find that rural households have a more diversified livelihood portfolio, yet they diversified away from farming over time. Poor rural households remained dependent on informal livelihood strategies due to the high entry barriers to formal employment. Urban households had significantly less livelihood diversification than rural households. Wealthy households in urban areas tended to depend on relatively more specialized livelihood clusters which were stable over time. These findings imply that distress is a potential reason for diversification in urban areas.
    Keywords: livelihood,diversification strategies,vulnerability,informality,Egypt
    JEL: O10 D1 D60
    Date: 2020
  7. By: Li, Zhimin; Ligon, Ethan
    Abstract: This paper studies informal risk-sharing regimes in a unified framework by examining intertemporal consumption behavior of rural households in Tanzania. We exploit a theoretically-consistent link between interest rates and cross-sectional consumption moments to test alternative risk-sharing models without requiring data on interest rates or assuming a restriction to eliminate the need for such data, which are often unavailable in developing economies. We specify tests that allow us to distinguish among models even with temporal dependence in income shocks. Our analysis shows that the consumption pattern in rural Tanzania is consistent with the self-insurance regime, and that risk aversion varies substantially across districts. Imposing a strict condition on interest rates, as often done in prior literature, misses their intertemporal heterogeneity and biases the estimation of risk aversion.
    Keywords: Social and Behavioral Sciences, Risk Sharing, Full Insurance, Self-Insurance, Private Information
    Date: 2020–01–08
  8. By: Sellare, Jorge; Meemken, Eva-Marie; Qaim, Matin
    Abstract: It is often assumed that voluntary sustainability standards – such as Fairtrade – could not only improve the socioeconomic wellbeing of smallholder farmers in developing countries but could also help to reduce negative health and environmental impacts of agricultural production. The empirical evidence is thin, as most previous studies on the impact of sustainability standards only focused on economic indicators, such as prices, yields, and incomes. Here, we argue that Fairtrade and other sustainability standards can affect agrochemical input use through various mechanisms with possible positive and negative effects. We use data from farmers and rural workers in Cote d’Ivoire to analyze effects of Fairtrade certification on fertilizer and pesticide use, as well as on human health and environmental toxicity. Fairtrade increases chemical input quantities and aggregated levels of toxicity. Nevertheless, Fairtrade reduces the incidence of pesticide-related acute health symptoms among farmers and workers. Certified cooperatives are more likely to offer training and other services related to the safe handling of pesticides and occupational health, which can reduce negative externalities in spite of higher input quantities. These results suggest that simplistic assumptions about the health and environmental effects of sustainability standards may be inappropriate.
    Keywords: Environmental Economics and Policy, International Development
    Date: 2020–01

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