nep-dev New Economics Papers
on Development
Issue of 2020‒01‒27
eighteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Legal History, Institutions and Banking System Development in Africa By Samuel Mutarindwa; Dorothea Schäfer; Andreas Stepan
  2. Does the Hunger Safety Net Programme Reduce Multidimensional Poverty? Evidence from Kenya By Sophie Song and Katsushi S. Imai
  3. Impact of the SADA-Northern Ghana Millennium Village Project on Multidimensional Poverty: A Comparison of Dashboard and Index Approaches By Edoardo Masset and Jorge García Hombrados
  4. Climate, Urbanization, and Conflict: The Effects of Weather Shocks and Floods on Urban Social Disorder By Castells-Quintana , David; McDermott, Thomas K.J.
  5. Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries By Pushkar Maitra; Sandip Mitra; Dilip Mookherjee; Sujata Visaria
  6. National-to-Local Aid and Recovery from Extreme Weather Events: Evidence from the Philippines By Abrigo , Michael R.M.; Brucal, Arlan
  7. Choice without Consciousness: Women’s Participation in Household Decisions and Gender Equality in Children’s Education By Saleemi, Sundus; Kofol, Chiara
  8. Does Foreign Aid Improve Gender Performance in Recipient Countries? By Ranjula Bali Swain; Supriya Garikipati
  9. Fertility Transitions in Developing Countries: Convergence, Timing, and Causes By Papagni, Erasmo
  10. The Growth Impact of Disasters in Developing Asia By Dagli , Suzette; Ferrarini, Benno
  11. Does Aid Reduce Poverty? By Juliana Yael Milovich
  12. Does education secularize the Islamic population? The effect of years of schooling on religiosity, voting, and pluralism in Indonesia By Masuda, Kazuya; Yudhistira, Muhammad Halley
  13. Adoption of Improved Seeds, Evidence from DRC By Tanguy Bernard; Sylvie Lambert; Karen Macours; Margaux Vinez
  14. The Health Costs of Coal-Fired Power Plants in India By Barrows, Geoffrey; Garg, Teevrat; Jha, Akshaya
  15. Health, wealth, and informality over the life cycle By Julien Albertini; Xavier Fairise; Anthony Terriau
  16. The Welfare Effects of India’s Rural Employment Guarantee By Stefan Klonner and Christian Oldiges
  17. Secession with Natural Resources By Dhillon, Amrita; Krishnan, Pramila; Patnam, Manasa; Perroni, Carlo
  18. Communication, Observability and Cooperation: a Field Experiment on Collective Water Management in India By O'Garra, Tanya; Alfredo, Katherine A.

  1. By: Samuel Mutarindwa; Dorothea Schäfer; Andreas Stepan
    Abstract: This paper links banking systems development to the colonial and legal history of African countries. Specifically, we investigate the impact of differing legal traditions on the development of existing investor and creditor protection, and on African banking systems. Based on a sample of 40 African countries from 2000 to 2016, our empirical findings show a significant dependence of current financial institutions on the legal origin and the colonization type. Findings also reveal that current legal financial institutions are not the major determinants of banking system development, whereas institutional and regulatory quality significantly matter for banking system development in both common and civil law countries. Strong creditor rights reduce the cost of banking in African countries
    Keywords: Legal origin, colonial history, financial institutions, banking system, Hausman-Taylor estimation
    JEL: G21 G38 G39 K40
    Date: 2020
  2. By: Sophie Song and Katsushi S. Imai
    Abstract: The purpose of this research is to evaluate the short-term impact and long-term sustainability of Kenya’s Hunger Safety Net Programme (HSNP). Difference-in-difference and propensity score matching estimations are used to determine the impact of programme participation on the household multidimen¬sional poverty index (MPI). We found that programme participation reduced the MPI significantly, which is mainly driven by the food insecurity dimension, and that the reduction in poverty is due to the reduction in the incidence and intensity, the latter in particular, of poverty among the ultra-poor households. Our analysis of the political economy of Kenya suggests that, while the government is making progress in the institutionalisation of social protection, weaknesses in the implementation and financing of the programme, as well as the short-term focus of impact evaluation, may undermine the programme’s poten¬tial to help build a strong state that is accountable for the eradication of poverty.
    Date: 2018–12
  3. By: Edoardo Masset and Jorge García Hombrados
    Abstract: This paper assesses the impact of the SADA-Northern Ghana Millennium Village Project (MVP) on multidimensional poverty using dashboard and index approaches. Using a unique, large dataset that spans five years and contains data on multiple welfare indicators, we esti- mate the impact of MVP on the Millennium Development Goals (MDGs) and on the global multidimensional poverty index (global MPI). We find that the project had a limited impact on the MDGs and yet a positive impact on the global MPI. We assess the robustness of the im- pact of MVP on the global MPI, and we conclude that it was largely driven by the sensitivity of the index to changes in a few MDG indicators. We conclude that the MVP had a limited impact on welfare and that the global MPI should be used with caution in the evaluation of development programmes.
    Date: 2019–10
  4. By: Castells-Quintana , David (Universidad Autonoma de Barcelona); McDermott, Thomas K.J. (National University of Ireland Galway)
    Abstract: In this paper, we test the effect of weather shocks and floods on urban social disorder for a panel of large cities in developing countries. We focus on a particular mechanism, namely the displacement of population into (large) cities. We test this hypothesis using a novel dataset on floods—distinguishing those that affected large cities directly from those that occurred outside of our sample of large cities. Floods are found to be associated with faster growth of the population in the city, and in turn with a higher likelihood (and frequency) of urban social disorder events. Our evidence suggests that the effects of floods on urban social disorder occur (mainly) through the displacement of population, and the “push” of people into large cities. Our findings have important implications for evaluating future climate change, as well as for policies regarding adaptation to climate change and disaster resilience.
    Keywords: climate change; conflict; floods; migration; rainfall; social disorder; urbanization
    JEL: D90 I30 J60 O10 Q00 Q01 Q50
    Date: 2019–07–23
  5. By: Pushkar Maitra (Department of Economics, Monash University, Clayton Campus, VIC 3800, Australia.); Sandip Mitra (Sampling and Official Statistics Unit, Indian Statistical Institute, 203 B.T. Road, Kolkata 700108, India.); Dilip Mookherjee (Department of Economics, Boston University, 270 Bay State Road, Boston, MA 02215, USA.); Sujata Visaria (Department of Economics, Lee Shau Kee Business Building, Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong.)
    Abstract: We compare two different methods of appointing a local commission agent as an intermediary for a credit program. In the Trader-Agent Intermediated Lending Scheme (TRAIL), the agent was a randomly selected established private trader, while in the Gram Panchayat-Agent Intermediated-Lending Scheme (GRAIL), he was randomly chosen from nominations by the elected village council. More TRAIL loans were taken up, but repayment rates were similar, and TRAIL loans had larger average impacts on borrowers’ farm incomes. The majority of this difference in impacts is due to differences in treatment effects conditional on farmer productivity, rather than differences in borrower selection patterns. The findings can be explained by a model where TRAIL agents increased their middleman profits by helping more able treated borrowers reduce their unit costs and increase output. In contrast, for political reasons GRAIL agents monitored the less able treated borrowers and reduced their default risk.
    Keywords: Targeting, Intermediation, Decentralization, Community Driven Development, Agricultural Credit, Networks JEL: H42, I38, O13, O16, O17
    Date: 2020–01
  6. By: Abrigo , Michael R.M. (Philippine Institute for Development Studies); Brucal, Arlan (London School of Economics and Political Science)
    Abstract: We examine the link between extreme weather events and national aid and transfers at the municipal level in the Philippines between 1992 and 2015. Using local-level data of public income and expenditures, local precipitation, poverty incidence, and satellite-based night light luminosity, we find that the national government seems to exhibit strategic behavior by allocating more national aid and transfers during dry spells, in which damage is significantly higher and more prolonged compared to periods of higher-than-usual precipitation. Notwithstanding, the amount of national aid and transfers in these events were very small at about $2 per capita per affected municipality, suggesting that the lack of effectiveness of aid and transfers could be the result of a lack of capacity rather than poor government allocation of public funds.
    Keywords: aid and transfers; impact evaluation; natural disasters
    JEL: H84 O19 Q54
    Date: 2019–12–10
  7. By: Saleemi, Sundus; Kofol, Chiara
    Abstract: In this paper, we test if households where women participate in decisions regarding children’s education and allocation of household education budgets incur more equal expenditures on education of boys and girls. Moreover, we test if women’s awareness of gender equality can reduce inequality between boys and girls at the household level. We estimate these effects using three rounds of longitudinal data of rural households in Pakistan. We use both household and year fixed effects to control for endogeneity of the dependent and explanatory variables. The results suggest that households where women participate in decisions regarding children’s education spend higher shares of education expenditures on education of girls in the secondary school age group (11-16). The results of Heckman Selection Model, corroborated by an estimated logit model, suggest that in households where women participate in children’s education decisions and where women are aware of gender equality in education, girl children are more likely to be enrolled in school. The paper contributes to the refinement of measures of women’s empowerment and to understanding of the mechanisms to achieve gender equality in education.
    Keywords: Consumer/Household Economics, Institutional and Behavioral Economics, Labor and Human Capital
    Date: 2020–01–20
  8. By: Ranjula Bali Swain; Supriya Garikipati
    Abstract: An explicit goal of foreign aid is to promote female empowerment and gender equality in developing countries. The impact of foreign aid on these latent variables at the country level is not yet known because of various methodological impediments. We address these by using Structural Equation Models. We use data from the World Development Indicators, the World Governance Indicators and the OECDs Credit Reporting System to investigate if foreign aid has an impact on gender performance of recipient countries at the country level. Our results suggest that to observe improvement in gender performance at the macro-level, foreign aid must target the gender outcomes of interest in a clearly measurable ways.
    Keywords: foreign aid, gender performance, structural equation model
    JEL: O11 J16 C13
    Date: 2018–12
  9. By: Papagni, Erasmo
    Abstract: This paper studies the dynamics of fertility in 180 countries in theperiod 1950-2015 and investigates the determinants of the onset of fertility transitions. We find evidence of convergence in three groups of countries, and distinguish the transitioning countries from those not transitioning. The estimation of the year of onset of the fertility transitionis followed by an econometric analysis of the causes of this event. Instrumental-variable estimates show that increasing female education and reduced infant mortality are important determinants of fertility decline, while per-capita GDP has probably worked in the opposite direction. These results are confirmed by the application of Lewbel's (2012) methods where identification is based on heteroskedasticity.
    Keywords: Land Economics/Use
    Date: 2020–01–24
  10. By: Dagli , Suzette (Asian Development Bank); Ferrarini, Benno (Asian Development Bank)
    Abstract: This paper estimates the growth impact of disasters, with a focus on developing Asia and its subregions. It finds that severe disasters slow down annual growth in the Pacific island countries by between 1 and 2 percentage points on average. This should come as no surprise, given these economies’ extreme exposure, structural vulnerability, and small size relative to the footprint of major natural hazards. The growth impact is less clear for other regions and worldwide, mainly because disaster effects tend to be highly localized and get diluted in the context of cross-country regressions with nationwide growth as the unit of analysis.
    Keywords: developing Asia; disasters; economic growth; natural hazards
    JEL: O47 Q51 Q54
    Date: 2019–06–26
  11. By: Juliana Yael Milovich
    Abstract: Fifty years of literature on aid effectiveness has so far proven inconclusive. Two main challenges still require some attention. The first is to properly identify the causal effect of aid on poverty alleviation. To address it, I exploit differences in the number of years countries have been temporary members of the United Nations Security Council as an instrument for the average amount of economic aid disbursed by the United States. The second is to obtain reliable data on poverty, which I confront by using multidimensional poverty data from the Oxford Poverty and Human Development Initiative (OPHI). For a sample of 64 developing countries, I estimate a significant relationship between higher amounts of aid received during the period 1946–1999 and lower Multidimensional Poverty Index (MPI) between 2000 and 2014. On the contrary, the relationship does not seem to be significant when poverty is measured from an income perspective. Alternative measures of poverty could help improve the understanding of the relationship between development aid and poverty alleviation and might also contribute to improved targeting for aid disbursements.
    Date: 2018–10
  12. By: Masuda, Kazuya; Yudhistira, Muhammad Halley
    Abstract: The association between schooling and religious beliefs has been widely documented in the social science literature. Evidence of a causal relationship is, however, limited, particularly in developing countries where religion still plays a significant role in politics and legislation. To bridge this gap in the literature, the present study uses the across cohort variations in the exposure to 1978 education reform in Indonesia to examine the impact of completed years of education on individual religiosity in later life. The results suggest that attaining another year of schooling reduces self-reported religiousness by four percentage points. Consistent with this finding, it also changes solitary religious acts by reducing the number of times individuals pray and the likelihood that they eat only halal food. Educational attainment, however, has little effect on participation in social religious activities or attitude toward other faiths, although it does reduce the religious influence on voting behavior. These results suggest that a program promoting educational attainment in Islamic countries may have an important impact on individual’s religiosity and country’s political economy in the long run., Highlight:・Evidence of a causal relationship between individual education and religiosity is limited in developing countries ・We use the 1978 education reform in Indonesia to examine the impact of completed years of education on religiosity in later life ・An additional year of schooling reduces self-reported religiousness and solitary religious acts ・It also reduces the influence of religious factors on voting when they elect the local leaders and the president ・Reform, which promotes the access to education, may have an externality on the political economy in Islamic countries.
    Keywords: Religion, Education, Indonesia, Voting behavior, Islam
    JEL: I15 I25 I26 J13 O15
    Date: 2020–01
  13. By: Tanguy Bernard (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique, IFPRI - International Food Policy Research Institute); Sylvie Lambert (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Karen Macours (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Margaux Vinez (The World Bank - The World Bank - The World Bank)
    Abstract: Agricultural input subsidies are often considered key instruments to increase adoption of new technologies in developing countries. Using unique experimental data from Equa- teur province in DRC, we document the e_ectiveness of such interventions in increasing households adoption of modern seed varieties (MVs). High subsidy levels increase adop- tion, in particular when other access constraints were also relieved. Demand is highly price sensitive, but demand curves do not display strong discontinuity at low prices. We _nd very limited spillover e_ects on adoption by non-voucher recipients. Adoption persists to some extent in the season that follows voucher distribution.
    Keywords: agricultural policies,technology adoption,input subsidies,Sub- Saharan Africa,Democratic Republic of Congo,JEL Codes: Keywords: agricultural policies
    Date: 2019–12
  14. By: Barrows, Geoffrey (Ecole Polytechnique, Paris); Garg, Teevrat (University of California, San Diego); Jha, Akshaya (Carnegie Mellon University)
    Abstract: This paper estimates the effect of coal-fired power plants on infant mortality in India. We find that a one GW increase in coal-fired capacity corresponds to a 14% increase in infant mortality rates in districts near versus far from the plant site. This effect is 2-3 times larger than estimates from the developed world. Our effects are larger for: (1) older plants, (2) plants located in areas with higher baseline levels of pollution, and (3) plants burning domestic rather than imported coal. The environmental benefits from policy aimed at the power sector are thus likely to be substantially higher if targeted at older plants located in more polluted areas tailored to burn domestic rather than imported coal.
    Keywords: coal, electricity, India, air pollution, infant mortality, infrastructure
    JEL: I15 Q51 Q56 Q48
    Date: 2019–12
  15. By: Julien Albertini (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Xavier Fairise (GAINS, University of Le Mans); Anthony Terriau (GAINS, University of Le Mans)
    Abstract: How do labor market and health outcomes interact over the life cycle in a country characterized by a large informal sector and strong inequalities? To quantify the effects of bad health on labor market trajectories, wealth, and consumption, we develop a life-cycle heterogeneous agents model with a formal and an informal sector. We estimate our model using data from the National Income Dynamics Study, the first nationally representative panel study in South Africa. We run counterfactual experiments and show that health shocks have an important impact on wealth and consumption. The channel through which these shocks propagate strongly depends on the job status of individuals at the time of the shock. For formal workers, bad health reduces labor efficiency, which translates into lower earnings. For informal workers and the non-employed, the shock lowers the job finding rate and in- creases job separation into non-employment, which results in a surge in non-employment spells. As bad health spells persist more for non-employed than for employed individuals, the interaction between labor market risks and health risks generates a vicious circle.
    Keywords: Health, Wealth, Life cycle, Informality
    JEL: I14 I15 E26 O17 J46 J64
    Date: 2019
  16. By: Stefan Klonner and Christian Oldiges
    Abstract: We examine the welfare effects of India’s workfare program NREGA using a novel, almost sharp regression discontinuity design. We find large seasonal consumption increases in states implementing the program intensely, which are a multiple of the direct income gains. We also find increases in adolescents’ school attendance. Our results imply substantial general equilibrium effects. We conclude that, when properly implemented, the public employment program holds significant potential for reducing poverty and insuring households against various adverse implications of seasonal income shortfalls.
    Date: 2019–10
  17. By: Dhillon, Amrita (Kings College,London,and CAGE, University of Warwick); Krishnan, Pramila (University of Oxford and CEPR); Patnam, Manasa (CREST-ENSAE); Perroni, Carlo (University of Warwick, CAGE and CESIfo)
    Abstract: We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited are relatively larger proportion of natural resources. We argue that these patterns reflect how political reorganisation affected the quality of state governance of natural resources. We describe a model of collusion between state politicians and resource rent recipients that can account for the relationships we see in the data between natural resource abundance and post-break up local outcomes.
    Keywords: Natural Resources and Economic Performance ; PoliticalSecession ; Fiscal Federalism
    Date: 2020
  18. By: O'Garra, Tanya (Middlesex University); Alfredo, Katherine A.
    Abstract: This study is an empirical investigation of the potential for communication and observability interventions to increase cooperation around communal water treatment systems amongst villagers in rural India. Despite the dependence of many rural communities in India on communal water sources and treatment plants for safe drinking water, they often fail to collectively manage these resources, resulting in abandoned water points and treatment systems with consequent health and mortality impacts. Results of public goods games framed in terms of the management of communal water treatment systems suggest that observability (public disclosure of behaviour) had the very significant effect of decreasing contributions to the public good. Analysis suggests this was mainly due to conformity to frequently-observed free-riding. Only when participants were actively encouraged to negotiate agreements, did cooperation increase significantly - albeit intermittently. These results show that the success of institutional design principles devised to increase cooperation depends on existing social norms and practices in the community of interest. A failure to account for these informal rules and standards of behaviour may result in unintended consequences, such as a decline in collective action around the public good.
    Date: 2018–06–22

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