nep-dev New Economics Papers
on Development
Issue of 2020‒11‒16
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Colonizer Identity and Trade in Africa: Were the British More Favourable to Free Trade? By Federico Tadei
  2. Does Financial Literacy Influence Use of Mobile Financial Services in Malawi? Evidence from Malawi Household Survey Data By Mirriam Muhome Matita; Takondwa Chauma
  3. Will you marry me, later? Age-of-marriage laws and child marriage in Mexico By Belle\x{0301}s-Obrero, Cristina; Lombardi, Mari\x{0301}a
  4. Hearts and Minds: What explains the intensity of insurgent violence in India’s NER? By Kumar, Himangshu
  5. When fathers are gone: the consequences of paternal absence during the early years By Julieta Vera Rueda
  6. Participants in Non-Farm Activities in Rural Sudan: Patterns and Determinants By Ebaidalla M. Ebaidalla
  7. Distributional Aspects of Microcredit Expansions By Christiansen, T.; Weeks, M.
  8. Land Tenure Security, Credit Access and Agricultural Productivity in Cameroon By Tchinda Kamdem Eric Joel; Kamdem Cyrille Bergaly
  9. Legal Reforms, Conditional Cash Transfers, and Intimate Partner Violence: Evidence from Mexico By Gustavo J Bobonis; Roberto Castro; Juan S Morales
  10. Dynamics of off-farm self-employment in West African Sahel By Sènakpon Fidèle A. Dedehouanou; Didier Y. Alia
  11. Connective Financing: Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries By Richard Bluhm; Axel Dreher; Andreas Fuchs; Bradley C. Parks; Austin M. Strange; Michael J. Tierney
  12. Income Inequality in French West Africa: Building Social Tables for Pre-Independence Senegal and Ivory Coast By Guido Alfani; Federico Tadei
  13. The demographic window of opportunity and economic growth at sub-national level in 91 developing countries By Crombach, Lamar Gerard Alfons; Smits, Jeroen
  14. Corruption, Transaction Costs and Innovation in Africa By Laura Nelima Barasa

  1. By: Federico Tadei (Universitat de Barcelona)
    Abstract: It has often been claimed that the structure of export trade between Africa and Europe during the colonial period depended on the colonizer identity, with the British relying on free trade and the French employing instead monopsonistic policies. Yet, due to the lack of systematic data on colonial trade, this claim has so far remained untested. In this paper, I use recently available data on export prices from African colonies to estimate monopsonistic profit margins for British and French trading companies. The results challenge the view of the British colonizers as champions of free trade. The level of profit margins was determined much more by the local conditions in Africa than by the identity of the colonial power. The British did not necessarily rely on free trade more than the French and did so only when a stronger control of trade was not a viable option.
    Keywords: Africa, Trade Colonization, Development, Institutions, Market-Power.
    JEL: N17 F1 O43
    Date: 2020
  2. By: Mirriam Muhome Matita; Takondwa Chauma (Lilongwe University of Agriculture and Natural Resources, Malawi)
    Abstract: Mobile financial services are gaining prominence and could be a possible avenue for fast-tracking financial inclusion in developing countries, including Malawi. However, adoption and usage of such services remains low among the Malawi population. This study investigates the influence of financial literacy on financial behaviour of individuals in Malawi, specifically use of mobile phone-based financial transactions. Descriptive and econometric analyses were conducted using cross-sectional data obtained from the Reserve Bank of Malawi. Findings reveal that the likelihood of using mobile financial services increases with increasing levels of financial literacy, type of employment and peri-urban residence. Furthermore, men are more likely to transact on mobile phones than females and that although income levels matter in the use of mobile financial transactions, the magnitude of effect is negligible. Results suggest opportunities for expanding access to financial services and products such as differentiation in financial literacy education by characteristics of population including gender of users. Informal settings do not preclude expansion of digital payments, and therefore financial product innovation and addressing rural resident’s constraints to access mobile financial services is crucial.
    Date: 2019
  3. By: Belle\x{0301}s-Obrero, Cristina; Lombardi, Mari\x{0301}a
    Abstract: We provide empirical evidence on the impact of raising the minimum age of marriage to 18 years old on child marriage, early motherhood, and school enrollment in Mexico. Using a difference-in-differences model that takes advantage of the staggered adoption of this reform across states, we show that banning child marriage leads to a large and statistically significant reduction in the number of registered child marriages. However, we find no effect on school attendance or early fertility rates. We provide evidence that the mechanism behind these results is the substitution of formal marriage for informal unions. These findings suggest that when informal unions are a viable option for young couples, raising the minimum age of marriage is not enough to prevent early unions and their negative consequences.
    Keywords: Ciencia conductual, Cuidado infantil, Cultura, Desarrollo, Desarrollo social, Familia, Género, Mujer, Niñez,
    Date: 2020
  4. By: Kumar, Himangshu
    Abstract: India’s Northeastern region (NER) is defined by some of the world’s longest-running armed insurgencies, and a patchwork of special institutions defined on ethnic/tribal lines. Using an assembly constituency level panel dataset from 1994-2017, this paper examines the demographic, political and economic factors associated with high insurgent violence in the NER. The findings show that electing politicians with criminal records was associated with the lowest number of casualties in insurgent violence. In keeping with the counter-insurgency maxim of ’hearts and minds’, higher water and electricity is associated with mildly lower intensity of violence. However, a 1 percent increase in the percentage of young, unemployed, college-educated males is associated with 25 percent higher casualties. I then focus on a case where an ethnic group secured an autonomous territory within an Indian state in 2003, under the terms of a peace accord between insurgents and the government. Using a geographic regression discontinuity design, I show that arrangements for ethnic autonomy and land rights reduce economic activity (measured by nightlights); but the gap reduced over from 1996 to 2017.
    Keywords: conflict, insurgency, violence, affirmative action, public goods, India, Northeast India, Sixth Schedule
    JEL: H41 H77 O10 Z18
    Date: 2020–10–23
  5. By: Julieta Vera Rueda (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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)
    Abstract: I examine the causal effect of paternal absence during the first years of life on early childhood development. I take advantage of Young Lives study, a unique panel dataset including skill outcomes of pairs of siblings with different levels of paternal involvement. With a difference in difference approach, I first compare the younger sibling exposed to the father's absence in the early years versus the older one exposed at age 5. Then, I control for the gap in skills between siblings living in households with no absence. Results show that paternal absence in the early years leads to a relative worsening in nutritional outcomes when 5 years old. The gap persists when 8 and 12 years old, with no evidence of cumulative effects. On the contrary, younger siblings relatively outperform their older counterparts in cognition in Peru and Vietnam, sta tistically significant for the former country. These findings are consistent with critical windows for ability development during the first 1,000 days of life. I find support for this conclusion as I observe no strong evidence on differences in development when absence occurs at age 5 for the younger and 8 for the older sibling.
    Keywords: Early childhood development,Fatherhood,Developing countries
    Date: 2020–10
  6. By: Ebaidalla M. Ebaidalla (University of Khartoum Sudan)
    Abstract: Despite the importance of non-farm income in the livelihood of the rural population in Sudan, information available on its size and determinants is scanty. This study examined the patterns and determinants of decisions to participate in non-farm activities in rural Sudan. It also investigates whether the determinants of participation in non-farm activities vary across agriculture sub-sectors and income groups as well as among males and females. The data for this study was sourced from the Sudanese National Baseline Household Survey (NBHS) conducted by Sudan’s Central Bureau of Statistics in 2009. The results show that non-farm income is a crucial source of livelihood, contributing about 43% to household income in rural Sudan. The results of multinomial logit and probit estimation methods indicate that educational level, mean of transportation, lack of land and lack of access to formal credit are the most significant factors that push rural farmers to participate in non-farm activities. Surprisingly, the effect of household income was positive and significant, implying that individuals from rich households have higher opportunity to engage in non-farm activities compared to their poor counterparts.Moreover, the analysis revealed some symptoms of gender and location disparities in the effect of factors that influence participation in non-farm activities. The study concluded with some recommendations that aim to enhance the engagement in non-farm activities as an important diversification strategy to complement the role of the agriculture sector in improving rural economy in Sudan.
    Date: 2020
  7. By: Christiansen, T.; Weeks, M.
    Abstract: Various poverty reduction strategies are being implemented in the pursuit of eliminating extreme poverty. One such strategy is increased access to microcredit in poor areas around the world. Microcredit, typically defined as the supply of small loans to underserved entrepreneurs that originally aimed at displacing expensive local money-lenders, has been both praised and criticized as a development tool Banerjee et al. (2015c). This paper presents an analysis of heterogeneous impacts from increased access to microcredit using data from three randomised trials. In the spirit of recognising that in general the impact of a policy intervention varies conditional on an unknown set of factors, particular, we investigate whether heterogeneity presents itself as groups of winners and losers, and whether such subgroups share characteristics across RCTs. We find no evidence of impacts, neither average nor distributional, from increased access to microcredit on consumption levels. In contrast, the lack of average effects on profits seems to mask heterogeneous impacts. The findings are, however, not robust to the specific machine learning algorithm applied. Switching from the better performing Elastic Net to the worse performing Random Forest leads to a sharp increase in the variance of the estimates. In this context, methods to evaluate the relative performing machine learning algorithm developed by Chernozhukov et al. (2019) provide a disciplined way for the analyst to counter the uncertainty as to which algorithm to deploy.
    Keywords: Machine learning methods, microcredit, development policy, treatment effects, random forest, elastic net
    JEL: D14 G21 I38 O12 O16 P36
    Date: 2020–11–03
  8. By: Tchinda Kamdem Eric Joel; Kamdem Cyrille Bergaly (University of Dschang ,Cameroon)
    Abstract: Cameroonian farmers face two tenure systems: a modern regime and a customary regime. These two regimes are perpetually confronting each other, putting farmers in a total uncertainty as to the regime to adopt to ensure the sustainability of their ventures. This study aims to assess the influence of land tenure security on agricultural productivity through credit access. To achieve this goal, a two-stage sampling technique was applied to data from the third Cameroon Household Survey (ECAM 3). The number of farmers selected for the analysis was 602. These data were analysed using descriptive and three-step recursive regression models. The results of the analysis reveal that land tenure security improves agricultural productivity through the credit access it allows. A proof of the robustness of this result has been provided through discussion of the effects of land tenure security in different agro-ecological zones and through a distinction between cash crops and food crops. The overall results confirm that land tenure security positively and significantly influences agricultural productivity. The regression has also shown that the size of the farm defined in one way or another, the perception of farmers on their level of land tenure security and therefore indicates the intensity with which land tenure security influences agricultural productivity. The recorded productivity differential indicates that smallholder farmers, because they keep small farms, feel safer and produce more than those who keep medium-sized farms. The results also show that land tenure security significantly improves the value of production per hectare of food products that are globally imported into Cameroon. Therefore, we recommend that the public authorities promote land tenure security by reinforcing the unassailable and irrevocable nature of land title, but also by easing the conditions of access to it.
    Date: 2020
  9. By: Gustavo J Bobonis; Roberto Castro; Juan S Morales
    Abstract: We study the relationship between divorce law reforms codifying intimate partner violence (IPV) as legal grounds for unilateral divorce, the Oportunidades conditional cash transfer program, and the incidence of IPV in Mexico. Using data from three nationally representative surveys in 2003, 2006, and 2011, we show the legal reforms lead to a 55 percent increase in annual divorce rates, concentrated among couples with a history of violence. Comparing groups of beneficiary and non-beneficiary households within villages, we find that IPV rates converge for these couples in the longer run. Marital selection plays an important role in explaining the long-run relationships.
    Keywords: divorce laws; conditional cash transfer programs; Oportunidades; divorce; intimate partner violence; marital selection
    JEL: J12 J16 K42
    Date: 2020–11–05
  10. By: Sènakpon Fidèle A. Dedehouanou; Didier Y. Alia
    Abstract: This study uses detailed household-level data to analyse off-farm self-employment dynamics in Mali and Niger. It adds to the literature that acknowledges the existence of heterogeneities in informal work and the body of evidence on informal self-employment in fragile and conflict-affected countries. It finds that self-employed workers are more represented in the lower-tier informal work status, with a particularly high percentage in Niger and among female, rural, youth, and old adult workers in both countries.
    Keywords: Fragile states, Informality, Self-employment, dynamics, West African Sahel
    Date: 2020
  11. By: Richard Bluhm (SoDa Laboratories, Monash University); Axel Dreher (SoDa Laboratories, Monash University); Andreas Fuchs (SoDa Laboratories, Monash University); Bradley C. Parks (SoDa Laboratories, Monash University); Austin M. Strange (SoDa Laboratories, Monash University); Michael J. Tierney (SoDa Laboratories, Monash University)
    Abstract: This paper studies the causal effect of transport infrastructure on the spatial concentration of economic activity. Leveraging a new global dataset of geo-located Chinese government-financed projects over the period from 2000 to 2014 together with measures of spatial inequality based on remotely-sensed data, we analyze the effects of transport projects on the spatial distribution of economic activity within and between regions in a large number of developing countries. We find that Chinese-financed transportation projects reduce spatial concentration within but not between regions. In line with land use theory, we document a range of results which are consistent with a relocation of activity from city centers to their immediate periphery. Transport projects decentralize economic activity particularly strongly in regions that are more urbanized, located closer to the coast, and less developed.
    Keywords: transport costs, infrastructure, development finance, spatial concentration, China
    JEL: F15 F35 R11 R12 P33 O18 O19
    Date: 2020–11
  12. By: Guido Alfani (Bocconi University, IGIER and Dondena Centre); Federico Tadei (Universitat de Barcelona)
    Abstract: Sub-Saharan Africa is home today to some of the most unequal countries in the world, in Southern and Central Africa, as well as others that are close to the world average, in Western Africa. Yet, there is no consensus regarding the historical factors that led to such a situation. Given limited data on income distribution during colonial times, we do not know whether present-day inequality patterns can be traced back to the colonial period and which role was played by colonial institutions. Most of our knowledge comes from information on British colonies, while territories subjected to other colonial powers are much less well known. To address this gap, we analyze trends in income inequality for colonies in French West Africa, building social tables for Senegal and Ivory Coast during the last decades of colonial rule. We find that income inequality was high during the colonial period, because of the huge income differential between Africans and European settlers (especially in Senegal) and of high inequality within the African population (especially in the Ivory Coast). Nevertheless, it tended to reduce during colonial rule – but the trend inverted after independence. Our findings cast in a new light the connection between colonialism, extractive institutions, high inequality and inequality extraction ratios.
    Keywords: Africa, Inequality, Income Distribution, Colonization, Extractive Institutions, Social Tables.
    JEL: N17 O43
    Date: 2019
  13. By: Crombach, Lamar Gerard Alfons (KOF Swiss Economic Institute ETH Zürich); Smits, Jeroen
    Abstract: Data for 91 low- and middle- income countries (LMICs) are used to investigate the effect of the demographic transition on economic growth at sub-national level. We introduce a detailed classification of demographic window (DW) phases, determine how these phases are distributed among and within LMICs, and analyze the relationship between the DW and economic growth for 1,921 urban and rural areas of sub-national regions. Many regions in Asia, Latin America and the Middle East have entered the window, but most of sub-Saharan Africa is still in the traditional or pre-window phase. Multilevel analyses reveal higher growth rates in areas with lower and decreasing dependency ratios. Demographic effects are stronger in rural, more developed and more educated regions. Findings indicate that, in the coming years, the DW might strengthen economic growth in rural areas of LMICs, and particularly if accompanied by investments in education and rural development.
    Date: 2020–11–05
  14. By: Laura Nelima Barasa (University of Nairobi, Kenya)
    Abstract: This paper examines the relationship between corruption and transaction costs, as measured by asset specificity and innovation in Africa. We hypothesize that in the context of developing countries in Africa, corruption is significantly associated with innovation, and that this relationship is mediated by transaction costs, including physical asset specificity and human asset specificity. We test our hypotheses by means of a multiple mediation model. We use the product-of-coefficients approach and bootstrapping techniques to estimate firm-level data from the World Bank Enterprise Survey and Innovation Follow-up Survey for five countries in Sub-Saharan Africa. We find that corruption is positively associated with innovation, and that asset specificity positively mediates this relationship. We conclude that the positive relation between corruption and innovation offers support to the “grease-the-wheels” hypothesis. Furthermore, transaction costs involving physical asset specificity increase the likelihood of innovation in a business environment characterised by corruption, an indicator of poorly functioning institutions. Hence, policies focusing on strengthening institutions are likely to be beneficial for controlling corruption and stimulating innovation Lastly, policies pertaining to tax incentives related to physical asset investments are crucial for enhancing innovation.
    Date: 2020

This nep-dev issue is ©2020 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.