nep-dev New Economics Papers
on Development
Issue of 2020‒10‒26
ten papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The Rise and Fall of Import Substitution By Douglas A. Irwin
  2. Sharing Risk to Avoid Tragedy: Informal Insurance and Irrigation in Village Economies By Karol Mazur
  3. Latin American Brotherhood? Immigration and Preferences for Redistribution By Julian Martinez-Correa; Leonardo Peñaloza Pacheco; Leonardo Gasparini
  4. Do Commodity Price Shocks Cause Armed Conflicts? A Meta-Analysis of Natural Experiments By Graeme Graeme Blair; Darin Christensen; Aaron Rudkin
  5. Unconditional Cash Transfers: Do They Impact Aspirations of the Poor? By Malhi, Fareena Noor
  6. Formal sector enforcement and welfare By Gareth Liu-Evans; Shalini Mitra
  7. Public work and private violence By Kjelsrud, Anders; Sjurgard, Kristin Vikan
  8. A simulation-based estimation model of household electricity demand and appliance ownership By Poblete-Cazenave, Miguel; Pachauri, Shonali
  9. Better Health Impacts on Education By Azad, Kalam
  10. Non-cognitive characteristics and academic achievement in Southeast Asian countries based on PISA 2009, 2012, and 2015 By Jihyun Lee

  1. By: Douglas A. Irwin
    Abstract: In the 1950s, many economists believed that import substitution – policies to restrict imports of manufactured goods – was the best trade strategy to promote industrialization and economic growth in developing countries. By the mid-1960s, there was widespread disenchantment with the results of such policies, even among its proponents. This paper traces the rise and fall of import substitution as a development idea. Perhaps surprisingly, early advocates of import substitution were quite cautious in their support for the policy and were also among the first to question it based on evidence derived from country experiences.
    JEL: B31 F13 F14 O14 O19 O24
    Date: 2020–10
  2. By: Karol Mazur
    Abstract: I present a model of interaction between risk sharing and co-operation over irrigational investments in presence of limited commitment constraints and apply it to the case of farmers in rural India. I demonstrate that if access to irrigation can be regulated by villagers, the two institutions reinforce each other. However, if benefits of such investments are non-excludable (as is the case with provision by central authorities), they may harm local co-operation. Using the ICRISAT panel, I provide empirical support for the mechanism. Quantitative evaluation demonstrates significant reinforcement between the two institutions and economic losses due to sub-optimal irrigation management.
    Keywords: Risk Sharing; Limited Commitment; Village Economies; Endogenous Aggregate Risk; Irrigation; Public Goods; Endogenous Informal Institutions
    JEL: E20 O12 O11 O13 Q15
    Date: 2020
  3. By: Julian Martinez-Correa (CEDLAS-IIE-FCE-UNLP); Leonardo Peñaloza Pacheco (CEDLAS-IIE-FCE-UNLP); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP)
    Abstract: The effect of immigration on preferences for redistribution has been recently studied in the context of developed countries receiving migrants from poorer countries with very different cultural backgrounds. In this paper we explore this issue in the context of migration across similar Latin American countries. To this aim, we exploit data at the provincial level from a large attitudinal survey (LAPOP) and match it to immigration data from different sources. We follow three approaches: first, we implement an instrumental variables approach in a cross-section of censuses; second we estimate fixed effects models with data from a large sample of harmonized national household surveys, and third we exploit the massive inflow of Venezuelan refugees into the border country of Colombia with an instrumental variables methodology. Our results suggest a significant, negative and non-monotonic relationship between the share of immigrants at the provincial level and the support for redistribution policies. This anti-redistribution effect is larger among those individuals with higher income.
    JEL: O15 N36
    Date: 2020–10
  4. By: Graeme Graeme Blair (UCLA); Darin Christensen (UCLA); Aaron Rudkin (UCLA)
    Abstract: Scholars of the resource curse argue that reliance on primary commodities destabilizes governments: price fluctuations generate windfalls or periods of austerity that provoke or intensify civil conflict. Over 350 quantitative studies test this claim, but prominent results point in different directions, making it difficult to discern which results reliably hold across contexts. We conduct a meta-analysis of 46 natural experiments that use difference-in-difference designs to estimate the causal effect of commodity price changes on armed civil conflict. We show that commodity price changes, on average, do not change the likelihood of conflict. However, there are cross-cutting effects by commodity type. In line with theory, we find price increases for labor-intensive agricultural commodities reduce conflict, while increases in the price of oil, a capital-intensive commodity, provoke conflict. We also find that price increases for lootable artisanal minerals provoke conflict. Our meta-analysis consolidates existing evidence, but also highlights opportunities for future research.
    Keywords: resource curse, armed conflict, commodity prices, meta-analysis
    JEL: D74 Q20 Q30
    Date: 2020–09
  5. By: Malhi, Fareena Noor
    Abstract: Abstract Unconditional cash transfers are the key social protection strategy in low- and middle-income countries. However, the amount of unconditional cash transfers is too small to pull the poor out of poverty cycle, yet if they positively affect their aspirations – desire to achieve something – it can have a long run impact. In this paper, I employ propensity score weighting and regression adjustment, to examine the impact of unconditional cash transfers (Benazir Income Support Program (BISP)) on aspirations of the adults in Pakistan. Using Pakistan Rural Household Panel Survey 2012-2013, I construct the aspirations index by weighting and aggregating on three dimensions; income, assets and social status. I find BISP cash transfers to increase aspirations if adults, yet it has differential impact based on gender and income quartile of the household.
    Keywords: Unconditional Cash Transfers, Aspirations, BISP
    JEL: D60 D90 O1
    Date: 2020–07–09
  6. By: Gareth Liu-Evans; Shalini Mitra
    Abstract: Tax enforcement consistently lowers informality in the literature whereas the evidence is mixed for other factors affecting informality. Using several different samples of countries corresponding to different development levels, we find Rule of Law, the proxy for tax enforcement, to have a significant and robust effect on informality according to the continuous treatment test due to Belloni et al. (2014), which allows for uncertainty in the set of control variables via the use of a heteroscedasticity-robust Lasso method. A general equilibrium framework with heterogeneous firms and financial frictions further shows enforcement is welfarereducing for low to moderate costs of enforcement.
    Keywords: Lasso, Informal sector, welfare, tax enforcement, borrowing constraints, tax evasion
    JEL: O11 O17 I30 H26
    Date: 2020–10
  7. By: Kjelsrud, Anders (Dept. of Economics, University of Oslo); Sjurgard, Kristin Vikan (Dept. of Economics, University of Oslo)
    Abstract: Violence against women is persisting in many parts of the world. At the same time, there is a global trend of increased female labour force participation. In this paper we study the effect on intimate partner violence of a large public work program in India that explicitly encourages female participation (MGNREGA). Based on detailed administrative data, we show that the work program leads to more violence against women. We argue that the effect could be explained by a "male backlash" mechanism, where husbands exercise violence to regain power within marriage.
    Keywords: intimate partner violence; female employment; public work
    JEL: D19 J12 J16
    Date: 2020–09–17
  8. By: Poblete-Cazenave, Miguel; Pachauri, Shonali
    Abstract: Understanding how electricity demand is likely to rise once households gain access to it is important to policy makers and planners alike. Current approaches to estimate the latent demand of unelectrified populations usually assume constant elasticity of demand. Here we use a simulation-based structural estimation approach, employing micro-data from household surveys for four developing nations, to estimate responsiveness of electricity demand and appliance ownership to income considering changes both on the intensive and extensive margin. We find significant heterogeneity in household response to income changes, which suggest that assuming a non-varying elasticity can result in biased estimates of demand. Our results confirm that neglecting heterogeneity in individual behavior and responses can result in biased demand estimates.
    Keywords: Energy Access, Household Energy Demand, Appliances Uptake, Simulation-based Econometrics, Scenario Analysis
    JEL: C53 D12 O13 Q4
    Date: 2020–07
  9. By: Azad, Kalam
    Abstract: We analyze the effects of life expectancy on human capital with a big longitudinal yearly dataset over 2019-2015 for 143 countries. Our panel estimators capture country fixed effects and persistence in human capital. The preferred baseline estimates show that there is a significantly positive and robust relationship between life expectancy and human capital. When addressing the endogeneity of life expectancy with instruments, our preferred results remain comparable. Our analysis suggests that parents with improved life expectancy prefer quality child over quantity by reducing fertility and investing savings in child education.
    Keywords: Human Capital, Life Expectancy, Mortality, Survival, Saving, Fertility
    JEL: I00 I1 I12
    Date: 2020–09–15
  10. By: Jihyun Lee (University of New South Wales)
    Abstract: Non-cognitive characteristics of students in four Southeast Asian countries – Indonesia, Malaysia, Thailand, and Viet Nam – were reviewed based on the PISA 2009, 2012, and 2015 data. Overall, students in this region demonstrated similarities with respect to their non-cognitive dispositions such as learning habits, approaches to learning, motivation for school subject matters and self-beliefs about their abilities.The non-cognitive characteristics that were most prevalent in the region included enjoyment and instrumental motivation to learn, which were evidenced by the indices of intrinsicmotivation for mathematics (INTMAT), instrumental motivation for mathematics (INSTMOT), enjoyment in learning of science (JOYSCIE), and instrumental motivation in learning science (INSTSCIE). However, these variables were not strong predictors of student achievement in this region.The review also revealed that the best non-cognitive predictors of student achievement were metacognitive awareness (METASUM and UNDREM) for reading achievement; self-efficacy, self-concept, and anxiety (MATHEFF, SCMAT, and ANXMAT) for mathematics achievement; and environmental awareness and epistemological beliefs (ENVAWARE and EPIST) for science achievement. These variables were also the best predictors, on average, across all PISA participants and economies. However, some region-specific non-cognitive predictors were also noted. These were intrinsic motivation (INTMAT) in Malaysia; perseverance (PERSEV) in Thailand; and mathematics intentions (MATINTFC)in Viet Nam.Overall, the similarities found in the non-cognitive characteristics among Southeast Asian students suggest that (a) regional collaboration in designing the educational strategies may be beneficial and that (b) an implementation of regional questionnaires in future PISA surveys may be useful to gain an in-depth understanding of achievement-related factors in this region.
    Date: 2020–10–15

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