nep-dev New Economics Papers
on Development
Issue of 2020‒10‒19
nineteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The Legacy of the Slave Trade: Towards Identifying the Causal Impact of Mistrust in Medicine on Demand for Vaccination in Sub-Saharan Africa By Athias, Laure; Macina, Moudo
  2. Gender and LPG use after government intervention in rural north India By Vyas, Sangita; Gupta, Aashish; Khalid, Nazar
  3. Who benefits from health insurance? Uncovering heterogeneous policy impacts using causal machine learning By Noemi Kreif; Andrew Mirelman; Rodrigo Moreno-Serra; Taufik Hidayat,; Karla DiazOrdaz; Marc Suhrcke
  4. Saving Neonatal Lives for a Quarter By Valente, Christine; Sievertsen, Hans Henrik; Puri, Mahesh C.
  5. The Contribution of Residential Segregation to Racial Income Gaps: Evidence from South Africa By Florent Dubois; Christophe Muller
  6. Gendering Technological Change: Evidence from Agricultural Mechanization By Afridi, Farzana; Bishnu, Monisankar; Mahajan, Kanika
  7. Income Changes after Inter-city Migration By Eduardo Lora
  8. Teacher turnover in Rwanda By Andrew Zeitlin
  9. The Ties That Bind Us: Social Networks and Productivity in the Factory By Afridi, Farzana; Dhillon, Amrita; Sharma, Swati
  10. Can informal redistribution withstand formal safety nets? Insights from urban-rural transfers in Burkina Faso By Grimm, Michael; Hartwig, Renate; Reitmann, Ann-Kristin; Bocoum, Fadima Yaya
  11. Fracking, farmers, and rural electrification in India By Fetter, T. Robert; Usmani, Faraz
  12. Strengthening Producer Organizations to Increase Market Access of Smallholder Farmers in Uganda By Vargas Hill, Ruth; Maruyama, Eduardo; Olapade, Markus; Frölich, Markus
  13. Evaluating the Macroeconomic Impact of IMF Programs in Sudan By Muayad Ismail
  14. Roots of dissent: Trade liberalization and the rise of populism in Brazil By Iacoella, Francesco; Justino, Patrica; Martorano, Bruni
  15. Aggregate Effects from Public Works: Evidence from India By Cook, C. Justin; Shah, Manisha
  16. Shipwrecked by Rents By Arteaga, Fernando; Desierto, Desiree; Koyama, Mark
  17. Access to Finance among Small and Medium-Sized Enterprises and Job Creation in Africa By Brixiova, Zuzana; Kangoye, Thierry; Yogo, Urbain Thierry
  18. Coffee in crisis offers a lesson in resilience: evidence from Guatemala By Serfilippi, Elena; De Los Rios, Carlos; d’Errico, Marco
  19. Quantification and benefits of reducing post-harvest losses: Evidence for vegetables in Senegal By Beye, Assane; Komarek, Adam M.

  1. By: Athias, Laure; Macina, Moudo
    Abstract: There is a large body of anecdotal evidence from sub-Saharan Africa of widespread medical distrust leading to health program failures. In this paper, to isolate an exogenous variation in trust in medicine to explain contemporary health demand in sub-Saharan Africa, we rely on a widespread historical shock: the slave trade. We combine \possessivecite{NunnWantchekon2011} historical data on the slave trade by ethnic group with individual-level data, geolocated at the district level, from the 2010-2014 Demographic and Health Surveys (DHS) to examine the reduced-form relationship between ancestors’ exposure to the slave trade and children vaccination status against measles. Exploiting variations both within countries and districts, we find that children from mothers whose ancestors were exposed to the slave trade are less likely to be vaccinated. The size of the effect offsets or even dominates the ones obtained for standard determinants of health demand, such as education or revenue. Evidence from a variety of identification strategies shows that the slave trade affects demand for vaccination only through trust in medicine. We then provide explanations for the persistent effect of the slave trade. Consistent with the economic approach, we identify religious affiliations and matrilineal lineage systems as important cultural transmission mechanisms. Consistent with the evolutionary anthropology approach, we point to the similarity of the environment across generations due to colonial and contemporaneous abusive medical treatments to explain persistence of optimal mistrusting behavior.
    Keywords: Trust, Medicine, Slave trade, Health, Culture, Cultural transmission
    JEL: D12 I12 I18 J15 N57 Z13
    Date: 2020–09–16
  2. By: Vyas, Sangita; Gupta, Aashish; Khalid, Nazar
    Abstract: Exposure to air pollution from cooking with solid fuels has important consequences for public health. This paper focuses on rural north India, where despite robust economic growth and government subsidies, seven out of eight households mainly use solid fuels. We draw on new qualitative and quantitative data, and a recent policy environment that dramatically expanded ownership of liquid petroleum gas (LPG), to examine why households are slow to adopt clean fuels in rural north India. We ?nd that patriarchal gender norms and attitudes encourage the use of solid fuels in this region. North Indian society confers low status to women, promotes women's seclusion, and constrains women's engagement in economic activities outside of the home. These beliefs encourage women to preserve gas, promote women's work that facilitates the use of solid fuels, and hinder communication between the cook and the decision-maker regarding LPG re?fills. When rural north Indian households use gas, it is frequently to facilitate the adherence to norms of seclusion that prevent women from leaving the home to collect solid fuels. Future research and policy interventions should pay careful attention to the gender norms and attitudes that discourage the use of gas. Addressing these beliefs is essential to sustained LPG use and health improvements.
    Date: 2020–09–21
  3. By: Noemi Kreif (Centre for Health Economics, University of York, York, UK); Andrew Mirelman (World Health Organization, Geneva, Switzerland); Rodrigo Moreno-Serra (Centre for Health Economics, University of York, York, UK); Taufik Hidayat, (Center for Health Economics and Policy Studies (CHEPS), Faculty of Public Health, Universitas Indonesia, Depok, Indonesia); Karla DiazOrdaz (Department of Medical Statistics, Faculty of Epidemiology and Population Health, London School of Hygiene & Tropical Medicine, London, UK); Marc Suhrcke (Centre for Health Economics, University of York, UK and Luxembourg Institute of Socio-economic Research, Luxembourg)
    Abstract: To be able to target health policies more efficiently, policymakers require knowledge about which individuals benefit most from a particular programme. While traditional approaches for subgroup analyses are constrained only to consider a small number of arbitrarily set, pre-defined subgroups, recently proposed causal machine learning (CML) approaches help explore treatment-effect heterogeneity in a more flexible yet principled way. This paper illustrates one such approach – ‘causal forests’ – in evaluating the effect of mothers’ health insurance enrolment in Indonesia. Contrasting two health insurance schemes (subsidised and contributory) to no insurance, we find beneficial average impacts of enrolment in contributory health insurance on maternal health care utilisation and infant mortality. For subsidised health insurance, however, both effects were smaller and not statistically significant. The causal forest algorithm identified significant heterogeneity in the impacts of the contributory insurance scheme: disadvantaged mothers (i.e. with lower wealth quintiles, lower educated, or in rural areas) benefit the most in terms of increased health care utilisation. No significant heterogeneity was found for the subsidised scheme, even though this programme targeted vulnerable populations. Our study demonstrates the power of CML approaches to uncover the heterogeneity in programme impacts, hence providing policymakers with valuable information for programme design.
    Keywords: policy evaluation;machine learning;heterogeneous treatment effects;health insurance
    Date: 2020–10
  4. By: Valente, Christine (University of Bristol); Sievertsen, Hans Henrik (University of Bristol); Puri, Mahesh C. (Center for Research on Environment, Health and Population Activities)
    Abstract: Over 400,000 children die annually from neonatal sepsis, despite several RCTs finding that this can be prevented by chlorhexidine cord care (CHX) for only US$0.23 per dose. Unresolved heterogeneity in findings and other RCT scalability concerns contribute to slow CHX adoption. Studying the first national CHX roll-out — in Nepal — we find that CHX reduces neonatal mortality by 56 percent for births predicted to take place at home. We find no effect for predicted health facility births, which is consistent with heterogeneity in prior experimental estimates. Conditional on predicted place of delivery, there is little significant treatment effect heterogeneity.
    Keywords: neonatal mortality, chlorhexidine, Nepal
    JEL: I18 J13 O15
    Date: 2020–09
  5. By: Florent Dubois (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Christophe Muller (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we contend that local segregation should be an essential component of the analyzes of the determination of socio-ethnic income gaps. For this, we adopt a thorough distribution decomposition approach, as a general preliminary descriptive step to prospective specific structural analyses. Focusing on the contemporary White/African gap in South Africa, we first complete Mincer wage equations with an Isolation index that reflects the level of segregation in the local area where individuals dwell. Second, we decompose the income gap distribution into detailed composition and structure components. Third, we explore the heterogeneity of segregation effects on wage gaps along three theoretical lines: racial preferences, labor market segmentation, and networks links. Segregation is found to be the main contributor of the structure effect, ahead of education and experience, and to make a sizable contribution to the composition effect. Moreover, segregation is harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is beneficial at the top of the White income distribution. Only minor influences of racial preferences and labor market segmentation are found. Specific subpopulations are identified that suffer and benefit most from segregation, including for the former, little educated workers in agriculture and mining, often female, immersed in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation's noxious mechanisms.
    Date: 2020–07
  6. By: Afridi, Farzana (Indian Statistical Institute); Bishnu, Monisankar (Indian Statistical Institute); Mahajan, Kanika (Ashoka University)
    Abstract: Technological change in production processes with gendered division of labor across tasks, such as agriculture, can have a differential impact on women's and men's labor. Using exogenous variation in the extent of loamy soil, which is more amenable to deep tillage than clayey soil and therefore more likely to see adoption of tractor driven equipment for primary tilling, we show that mechanization has led to significantly greater decline in women's than men's labor on Indian farms. Reduced demand for labor in weeding, a task that requires precision and is thus more often undertaken by women, explains our findings. The estimates suggest that increased mechanized tilling led to a more than 22% fall in women's agricultural labor in India during 1999-2011. Our results highlight the gendered impact of technological change in contexts where there is sex-specific specialization of labor.
    Keywords: gender, specialization of labor, agriculture, technology, mechanization
    JEL: J16 J23 J43 O33
    Date: 2020–09
  7. By: Eduardo Lora (Center for International Development at Harvard University)
    Abstract: Using panel data for workers who change jobs, changes in several labor outcomes after inter-city migration are estimated by comparing workers in similar circumstances who move to a new city –the treatment group—with those who stay in the same city –the control group. After matching the two groups using Mahalanobis distances over a wide range of covariates, the methodology of “difference-in-difference treatment effects on the treated” is used to estimate changes after migration. On average, migrants experience income gains but their dedication to formal employment becomes shorter. Income changes are very heterogenous, with low-wage workers and those formerly employed by small firms experiencing larger and more sustained gains. The propensity to migrate by groups of sex, age, wage level, initial dedication, initial firm size and size of city of origin is significantly and directly correlated with the expected cumulative income gains of migration, and inversely with the uncertainty of such gains.
    Keywords: matched employer-employee panel data, diff-in-diff treatment effects, migration risks, migration determinants, Colombia
    JEL: J31 J61 J81
    Date: 2020–10
  8. By: Andrew Zeitlin
    Abstract: Despite widely documented shortfalls of teacher skills and effort, there is little systematic evidence of rates of teacher turnover in low-income countries. I investigate the incidence and consequences of teacher turnover in Rwandan public primary schools over the period from 2016-2019. To do so, I combine the universe of teacher placement records with student enrollment figures and school-average Primary Leaving Exam scores in a nationally representative sample of 259 schools. Results highlight five features of teacher turnover. First, rates of teacher turnover are high: annually, 20 percent of teachers separate from their jobs, of which 11 percent exit from the public-sector teaching workforce. Second, the burden of teacher churn is higher in schools with low learning levels and, perhaps surprisingly, in low pupil-teacher-ratio schools. Third, teacher turnover is concentrated among early-career teachers, male teachers, and those assigned to teach Math. Fourth, replacing teachers quickly after they exit is a challenge; 23 percent of exiting teachers are not replaced the following year. And fifth, teacher turnover is associated with subsequent declines in learning outcomes. On average, the loss of a teacher is associated with a reduction in learning levels of 0.05 standard deviations. In addition to class-size increases, a possible mechanism for these learning outcomes is the prevalence of teachers teaching outside of their areas of subject expertise: in any given year, at least 21 percent of teachers teach in subjects in which they have not been trained. Taken together, these results suggest that the problem of teacher turnover is substantial in magnitude and consequential for learning outcomes in schools.
    Date: 2020–09
  9. By: Afridi, Farzana (Indian Statistical Institute); Dhillon, Amrita (King's College London); Sharma, Swati (Indian Statistical Institute)
    Abstract: We use high frequency worker level productivity data from garment manufacturing units in India to study the effects of caste-based social networks on individual and group productivity when workers are complements in the production function but wages are paid at the individual level. Using exogenous variation in production line composition for almost 35,000 worker-days, we find that a 1 percentage point increase in the share of own caste workers in the line increases daily individual productivity by about 10 percentage points. The lowest performing worker increases her effort by more than 15 percentage points when the production line has a more homogeneous caste composition. Production externalities that impose financial costs due to worker's poor performance on co-workers within her social network can explain our findings. Our results suggest that even in the absence of explicit group-based financial incentives, social networks can be leveraged to improve both worker and group productivity.
    Keywords: caste, social networks, labor productivity, assembly lines, India
    JEL: Y40 Z13 J15 J24
    Date: 2020–09
  10. By: Grimm, Michael; Hartwig, Renate; Reitmann, Ann-Kristin; Bocoum, Fadima Yaya
    Abstract: Households in rural areas still depend on informal transfers to meet subsistence needs and cope with shocks. Yet, to provide additional monetary support, formal safety nets are increasingly introduced in developing countries. However, it remains unclear whether such social protection policies will have the desired welfare effects. This article addresses this question by analyzing the private transfer response to changes in the income of rural recipients using novel data from Burkina Faso. We assume that the transfer-income relationship is a non-linear one where transfer motives, and therefore also transfer responses, vary with the recipient's position in the income distribution. Our findings support this view. We find a pronounced, negative private transfer response among the poorest of the poor. This observation has important policy implications, because those households that depend most on private transfers, would be most affected by crowding-out effects. In terms of transfer motives, the negative relationship for the lowest income class is consistent with transfers being altruistically motivated. With increasing income levels, transfers cease being altruistic at the margin and switch toward exchange motives. However, the observed transfer pattern is also indicative of an (informal) insurance role of private transfers. Rural households receive higher private transfers in response to negative shocks. These results can serve as a basis for the design of formal social protection mechanisms in a context where informal redistribution still plays an important role.
    Keywords: private transfers,crowding-out,sharing norms,informal insurance,Burkina Faso
    JEL: D64 H31 I30 O12
    Date: 2020
  11. By: Fetter, T. Robert; Usmani, Faraz
    Abstract: The shale gas revolution in the United States induced an unprecedented commodity boom across northwestern India. Leveraging population-based discontinuities in the contemporaneous roll-out of India's national rural electrification scheme, we show that access to electricity increased total employment and nonagricultural employment in villages affected by this exogenous economic shock, but had no impact on labor markets elsewhere. This combination of two natural experiments highlights how complementary economic conditions drive heterogeneity in the labor-market impacts of rural electrification. It also helps explain the large variation in the reported impacts of such resource-intensive infrastructure investments globally.
    Keywords: rural electrification,heterogeneous impacts,labor markets,productive use,economic development,regression discontinuity,India
    JEL: H54 O13 O15 O18 Q40 Q56 R23
    Date: 2020
  12. By: Vargas Hill, Ruth (World Bank); Maruyama, Eduardo (IFPRI, International Food Policy Research Institute); Olapade, Markus (Center for Evaluation and Development (C4ED)); Frölich, Markus (University of Mannheim)
    Abstract: Smallholder agriculture in Sub-Saharan Africa is largely exposed to pervasive market failures, translating into missed opportunities and sub-optimal economic behavior. These failures can partly be traced to the importance of economies of scale in procuring inputs and marketing produce, where smallholders face disproportionately high transaction costs. Producer organizations could help to lessen transaction costs, however, only few farmers in Uganda sell through them. We introduce two interventions aimed at promoting marketing via producer organizations: Cash-on-Delivery (CoD) and Information-on-Sales (IoS), and analyze their impacts in an RCT design: We find that providing cash-on-delivery increases the probability that a member chooses to sell through the group, and hence the volumes bulked by each group. This increase in volumes appears to have enabled groups to secure higher prices for their produce. No significant effect could be found for the Information on Sales intervention, though.
    Keywords: rural producer organizations, smallholder farmers, cash constraints, asymmetric information, Uganda
    JEL: D71 O12 Q13
    Date: 2020–09
  13. By: Muayad Ismail (Department of Economics, University of Reading)
    Abstract: This paper applies a combination of quantitative techniques, namely the Generalized Evaluation Estimator (GEE) and Synthetic Control Method (SCM), to assess the impact of IMF programs implemented in Sudan on the performance of real GDP growth, inflation, and the current account balance. The two applied methods provide empirical evidence that IMF programs in Sudan were effective in reducing inflation during program periods, albeit with short-lived effects thereafter. However, conclusions drawn by the two approaches are divergent regarding the effects of IMF programs on GDP growth and the current account balance. While the GEE approach fails to detect any significant effects of Fund programs on growth and the current account balance for the entire sample period, the SCM concludes that the effects on growth (current account) have been positive (negative). Further, the GEE approach finds positive and significant effects of IMF programs on GDP growth when the analysis is restricted to cover IMF Staff Monitored Program (SMP) periods only. Notwithstanding these positive effects, the analysis indicates that deliberately keeping inflation rates very low during SMP program periods could have possibly constrained higher rates of GDP growth during the same periods.
    Keywords: IMF Programs, Generalized Evaluation Estimator, Synthetic Control, Stand-By Arrangements, Staff Monitored Programs
    JEL: F33 E65
    Date: 2020–10–06
  14. By: Iacoella, Francesco (UNU-MERIT); Justino, Patrica (UNU-WIDER); Martorano, Bruni (UNU-MERIT, Maastricht University)
    Abstract: This paper investigates the long-term impact of economic shocks on populism, by exploiting a natural experiment created by the trade liberalization process implemented in Brazil between 1990 and 1995. This high impact and low duration event generated a profound shock to the economy with, we argue, long term implications for political outcomes. We focus on the 2002 and 2018 presidential elections in Brazil, which resulted in the election of a left-wing and a right-wing populist president, respectively. The results show that trade reforms explain the rise of populism in Brazil during the last two decades. Microregions with larger tariff cuts in the early 1990s had significantly higher preferences for Lula in 2002 and were also more likely to support Bolsonaro in 2018. The link between trade liberalization and populism is mediated by austerity in both cases. The shift between left-wing and right-wing preferences is driven by the supply side of populism, whereby each leader took advantage of existing cleavages in the country at the time of their election-driven by inequality in the case of Lula and by insecurity and corruption in the case of Bolsonaro-to develop narratives against austerity that would appeal to their target audiences.
    Keywords: trade liberalization, populism, austerity, inequality, insecurity, Brazil
    JEL: D72 F14 I38 O12
    Date: 2020–10–05
  15. By: Cook, C. Justin (University of California, Merced); Shah, Manisha (University of California, Los Angeles)
    Abstract: This paper explores the aggregate economic effects from India's National Rural Employment Guarantee Scheme (NREGS), which provides up to 100 days of labor to rural laborers at the mandated minimum wage. We examine the within-district change to night-time lights and banking deposits using the staggered program rollout for identification. We find consistent and robust evidence that NREGS increased aggregate economic output by 1-2% per capita measured by night-time lights. This effect, however, is not equal across districts. We observe no positive effect of the program in poorer districts, illuminating an important source of heterogeneity.
    Keywords: NREGS, aggregate output
    JEL: O11 O38 O47
    Date: 2020–09
  16. By: Arteaga, Fernando; Desierto, Desiree; Koyama, Mark
    Abstract: The trade route between Manila and Mexico was a monopoly of the Spanish Crown for more than 250 years. The Manila Galleons were “the richest ships in all the oceans”, but much of the wealth sank at sea and remain undiscovered. We introduce a newly constructed dataset of all of the ships that travelled this route. We show formally how monopoly rents that allowed widespread bribe-taking would have led to overloading and late ship departure, thereby increasing the probability of shipwreck. Empirically, we demonstrate not only that these late and overloaded ships were more likely to experience shipwrecks or to return to port, but that such effect is stronger for galleons carrying more valuable, higher-rent, cargo. This sheds new light on the costs of rent-seeking in European colonial empires.
    Keywords: Corruption, Rent-seeking, Bribery, Shipwrecks
    JEL: K00 N00 N13
    Date: 2020–09–16
  17. By: Brixiova, Zuzana (University of Economics Prague); Kangoye, Thierry (African Development Bank); Yogo, Urbain Thierry (World Bank)
    Abstract: In the past decade inclusive growth, that is job-rich growth, has topped the policy agenda in developing countries. This paper investigates how the access to finance affects employment in small and medium-sized enterprises (SMEs) in Sub-Saharan Africa. It first presents a model where firm creation requires entrepreneurial search and paying the start-up costs, while the firm's size in terms of employment depends on the access to credit. Under the financial market imperfections, access to credit can be a binding constraint on firm entry and employment even when the banks have sufficient liquidity. Using an impact evaluation-based approach on firm-level data from 42 African countries, we show that SMEs with access to formal financing create more jobs than firms without access, with employment in firms having access to more affordable and larger loans growing the fastest. The impact of access to finance is stronger for firms in manufacturing than in services, pointing to sectoral targeting of finance as a possible policy supporting industrialization.
    Keywords: entrepreneurship, financial inclusion, employment, propensity score matching
    JEL: L2 G2 D22 C1
    Date: 2020–09
  18. By: Serfilippi, Elena; De Los Rios, Carlos; d’Errico, Marco
    Abstract: The idea that resilience plays a role in mitigating the effects of disaster and climate change is becoming widespread across the development community. As a result, efforts have been made to translate the concept of resilience into actionable metrics to better understand it. In this paper, we use panel micro-data from coffee farmers in Guatemala severely affected by a widespread attack of Hemileia Vastatrix (leaf rust). This covariate shock provides a unique opportunity to a) check if greater resilience capacity is associated with better reaction to exogenous shock; and b) explore the key drivers of response mechanisms. Ultimately, this paper looks at how resilience enhancing and agroecological interventions must be combined to reduce the negative effects of leaf rust. Findings show a negative impact of the shock on households' well-being; the strategic role of resilience in mitigating those negative effects; and provide evidence on how an approach that enhances both absorptive and adaptive capacity, can be beneficial for coffee producers.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Crop Production/Industries
    Date: 2020–10–09
  19. By: Beye, Assane; Komarek, Adam M.
    Abstract: This study examines on-farm post-harvest losses (PHL) for three vegetable crops (onion, tomato, and pimento) in Senegal and the potential economic benefits associated with reducing PHL for these three vegetables. Household survey data was used to quantify the on-farm PHL for these vegetables at different stages between the crop’s harvest and the sale or consumption. A multi-market model was used to simulate the effect of eliminating vegetable PHL on the total value of vegetable supply and international trade of vegetables at the national level. Results suggest that on average 30% of vegetable production is lost on-farm and is therefore unavailable for sale or consumption. Eliminating these losses could increase the total value of vegetable supply by 45% (US $72 million) per year and reduce vegetable imports by 22% (127,000 tons) per year. Moreover, our results indicate that both private costs to farmers and public costs to the government related to such PHL reductions would need due consideration when prioritizing between investments in the agricultural sector and beyond.
    Keywords: Agricultural and Food Policy, Production Economics, Research and Development/Tech Change/Emerging Technologies
    Date: 2020–10–08

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