nep-dev New Economics Papers
on Development
Issue of 2021‒01‒25
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Quality of sub-national government and regional development in Africa By Yohan Iddawela; Neil Lee; Andres Rodriguez-Pose
  3. Political Institutions and Health Expenditure By Johannes Blum; Florian Dorn; Axel Heuer
  4. Is The Agricultural Sector Cursed Too? Evidence From Sub-Saharan Africa By Elizavetta Dorinet; Pierre-André Jouvet; Julien Wolfersberger
  5. Murder nature weather and violent crime in Brazil By Ishak, Phoebe W.
  6. Partisan Alignment and Political Corruption: Evidence from a New Democracy By Alexander Stoecker
  7. Does connectivity reduce gender gaps in off-farm employment?: Evidence from 12 low- and middle-income countries By Eva-Maria Egger; Aslihan Arslan; Emanuele Zucchini
  8. IFAD RESERACH SERIES 64 - How the adoption of drought-tolerant rice varieties impacts households in a non-drought year: Evidence from Nepal By Vaiknoras, Kate; Larochelle, Catherine; Alwang, Jeffrey
  9. Improving Crop Yields in Sub-Saharan Africa - What Does the East African Data Say By Alun H. Thomas
  10. Immigration and Employment: Substitute Versus Complementary Labor in Selected African Countries By Arina Viseth
  11. Is Son Preference Disappearing from Bangladesh? By Asadullah, Niaz; Mansoor, Nazia; Randazzo, Teresa; Wahhaj, Zaki
  12. Health Returns to Birth Weight: Evidence from Developing Countries By Kamble, Vaibhav
  13. Welfare Impact of Hosting Refugees in Ethiopia By Ayenew, Ashenafi Belayneh
  14. Unit Labor Costs and Manufacturing Sector Performance in Africa By Karmen Naidoo; Léonce Ndikumana

  1. By: Yohan Iddawela; Neil Lee; Andres Rodriguez-Pose
    Abstract: Despite widespread interest in government quality and economic development, the role of sub-national government has been largely overlooked. This represents an omission in Africa, given ongoing processes of devolution in much of the continent. In this article, we consider the impact of sub-national government institutions on economic development in 356 regions across 22 African countries. We create a novel index of sub-national government quality based on large-scale survey data and assess its impact on regional economies using satellite data on night light luminosity. To address causality concerns, we instrument sub-national government quality with data from pre-colonial societies. Our results show a positive and significant relationship between sub-national government quality and regional economic development, even when controlling for the quality of national level institutions. Better sub-national governments are a powerful but often overlooked determinant of development in Africa.
    Keywords: Institutions, quality of government, regions, Africa, decentralisation
    Date: 2021–01
  2. By: Tahir Andrabi (Pomona College, California, USA); Sheetal Bharat (BASE University); Michael Kuehlwein (Pomona College, California, USA)
    Abstract: In contrast to the literature on railways, there have been few empirical studies of the impact of telegraphs, another revolutionary technology, on price convergence. The few that exist measure the impact of telegraphs on commodity price differences between countries in the presence of a well-established efficient transportation system: ocean shipping. This paper estimates the impact of telegraphs within a developing economy, British India, with sparse, inefficient transportation. We use a rich dataset of rice and wheat prices for 192 districts between 1862 and 1920. Over 14,000 district pairs are linked by telegraph in the sample. We obtain strong evidence that, even in this context, telegraphs significantly reduced grain price dispersion before railways appeared. There were also spillover effects on neighboring districts. The combined impact of railways and telegraphs still cannot explain most of the convergence in our sample. However, the results highlight the potential importance that communication advances had on late 19th century market integration in less developed economies.
    Keywords: Price convergence; information; telegraph; British India; grain prices
    JEL: L96 N75 O13 O18 O38
    Date: 2021–01
  3. By: Johannes Blum; Florian Dorn; Axel Heuer
    Abstract: We examine how political institutions influence health expenditure by using a panel of 151 developing and developed countries for the years 2000 to 2015 and four measures of democracy. Our pooled OLS analysis shows that democracies have 20–30% higher government health expenditure relative to GDP than their autocratic counterparts. An instrumental variable approach which exploits the regional diffusion of democracy confirms the positive effect of democracy on government health expenditure. Panel fixed effects and event study models also suggest a positive within-country effect of democratization on government health expenditure within a short period after regime transition. Democratic rule, however, does not turn out to significantly influence private health expenditure compared to autocracies. We conclude that democracies may care more for their citizens and strive to decrease inequalities in the access to health care.
    Keywords: Democracy, panel data, instrumental variable, development, health expenditure
    JEL: I15 I18 H51 P50 C23 C26
    Date: 2021
  4. By: Elizavetta Dorinet (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Pierre-André Jouvet (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Julien Wolfersberger (ECO-PUB - Economie Publique - AgroParisTech - INRA - Institut National de la Recherche Agronomique, Chaire économie du climat - Chaire économie du climat)
    Abstract: Extractive and agricultural resources do not have the same impact on poverty reduction and can compete with each other. We examine how extractive resource windfalls affect agricultural productivity, measured as the amount of output per worker in the agricultural sector. This is important since agricultural productivity is a key element of structural transformation and poverty reduction. To do this, we exploit a panel dataset of 38 countries over 1991-2016 and construct a country-specific commodity price index that captures resource-related gains and losses in aggregate disposable income. We find that an increase in the commodity price index leads to a drop in agricultural productivity in Sub-Saharan economies. Among the possible mechanisms to explain this result, our findings highlight the lack of spillovers across sectors and the low level of agricultural investment in autocratic regimes, both related to the exploitation of extractive resources. We also find that higher agricultural productivity is positively associated with the release of workers towards manufacturing and services, confirming its importance for structural transformation.
    Keywords: Agricultural productivity,Structural transformation,Natural resource curse
    Date: 2020–12–02
  5. By: Ishak, Phoebe W.
    Abstract: This paper examines the effect of weather shocks on violent crime using disaggregated data from Brazilian municipalities over the period 1991-2015. I document that adverse weather shocks in the form of droughts lead to a significant increase in violent crime, with the effect appearing to persist beyond the growing season and over the medium run. To explain this persistence, I show that weather uctuations are positively associated not only with agriculture yields, but also with the overall economic activity. Moreover, evidence shows the dominance of opportunity cost mechanism re ected in the uctuations of the labor income especially for the agriculture and unskilled workers, giving credence that it is indeed the labor income that matters and not the general socio-economic conditions. Other factors such as local government budget capacity, (un)-employment, poverty, inequality, and psychological factors do not seem to explain violent crime rates.
    Keywords: Weather shocks,violent crime,labor market,Brazil
    Date: 2021
  6. By: Alexander Stoecker (University of Siegen)
    Abstract: I analyze the link between partisan alignment of local politicians and the incidence of political corruption, using novel hand-collected data on local political corruption in Ghana. In line with political ambition theory, I hypothesize that local politicians aligned with the national government have incentives to control fiscal irregularities within their localities in order to appease their national party leaders and preserve their party’s reputation. The empirical analysis, based on 205 districts observed over the period 2013-2018, indeed suggests significantly lower levels of political corruption in aligned districts. Partisan alignment reduces corruption by 2.0 percentage points, equivalent to roughly 50 percent of the 3.9 percent mean-level of non-aligned districts. This effect is more pronounced in districts with (i) less competitive local legislative elections, (ii) better financial endowments, and (iii) female local parliamentarians. It appears that high levels of political polarization and intense party competition, as observed in Ghana, are important explanations for this finding.
    Keywords: corruption, political alignment, local public finance, intergovernmental transfers, political career concerns, Africa
    Date: 2021
  7. By: Eva-Maria Egger; Aslihan Arslan; Emanuele Zucchini
    Abstract: Gender gaps in labour force participation in developing countries persist despite income growth or structural change. We assess this persistence across economic geographies within countries, focusing on youth employment in off-farm wage jobs. We combine household survey data from 12 low- and middle-income countries in Asia, Latin America, and sub-Saharan Africa with geospatial data on population density, and estimate simultaneous probit models of different activity choices across the rural-urban gradient.
    Keywords: Gender gap, Youth, Employment, Asia, Latin America, Sub-Saharan Africa
    Date: 2021
  8. By: Vaiknoras, Kate; Larochelle, Catherine; Alwang, Jeffrey
    Abstract: Stress-tolerant rice varieties (STRVs) are bred to be high yielding and tolerant to climate shocks such as drought. In Nepal, several drought-tolerant STRVs have been released and widely adopted. This paper estimates the impacts of the adoption of STRVs on first- and higher-order household outcomes in a non-drought year. It controls for selection bias using correlated random effects models to eliminate unobserved plot and household-level heterogeneity. STRVs have a higher yield, a lower yield variance and a shorter growing duration than traditional landrace varieties. In addition, households apply more early-season chemical fertilizer and land preparation labour to plots planted to STRVs compared to landraces. This indicates that the first-order impacts of the adoption of STRVs induce behavioural changes that help to modernize agricultural practices. Finally, this study conducts a randomized experiment in which half of the sampled households provided additional detail on their agricultural inputs.
    Keywords: Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety
    Date: 2020–12–30
  9. By: Alun H. Thomas
    Abstract: Recent micro level data from East Africa is used to benchmark aggregate data and assess the role of agricultural inputs in explaining variation in crop yields on smallholding plots. Fertilizer, improved seeds, protection against erosion and pesticides improve crop yields in Rwanda and Ethiopia, but not Uganda, possibly associated with lack of use there. With all positive yield determinants in place, wheat and maize yields could increase fourfold. The data hints at the negative effect of climate change on yields and the benefits of accompanying measures to mitigate its adverse impact (access to finance and protection against erosion). The adverse effect of crop damage on yields varies between 12/13 percent (Rwanda, Uganda) to 36 percent (Ethiopia). Protection against erosion and investment financing mitigate these effects considerably.
    Keywords: Education;Agroindustries;Consumption;Agricultural sector;Climate change;WP,yield,crop,crop yield,Rwanda,Ethiopia
    Date: 2020–06–12
  10. By: Arina Viseth
    Abstract: This paper uses census and household survey data on Cameroon, Ghana, and South Africa to examine immigration’s impact in the context of a segmented labor market in Sub-Saharan Africa. We find that immigration affects (i) employment (ii) employment allocation between informal and formal sectors, and (iii) the type of employment within each sector. The direction of the impact depends on the degree of complementarity between immigrants and native workers’ skills. Immigration is found to be productivity-enhancing in the short to near term in countries where, the degree of complementarity between immigrants and native workers’ skill sets is the highest.
    Keywords: Migration;Employment;Labor markets;Informal employment;Self-employment;WP,immigration share,wage employment,native worker,immigration's impact,impact immigration
    Date: 2020–07–31
  11. By: Asadullah, Niaz (University of Malaya); Mansoor, Nazia (Université Paris-Dauphine); Randazzo, Teresa (University of Kent); Wahhaj, Zaki (University of Kent)
    Abstract: Historically, son preference has been widely prevalent in South Asia, manifested in the form of skewed sex ratios, gender differentials in child mortality, and worse educational investments in daughters versus sons. In the present study, we show, using data from a purposefully designed nationally representative survey for Bangladesh, that among women of childbearing age, son bias in stated fertility preferences has weakened and there is an emerging preference for gender balance. We examine a number of different hypotheses for the decline in son preference, including the increasing availability of female employment in the manufacturing sector, increased female education, and the decline of joint family living. Using survival analysis, we show that in contrast to stated fertility preferences, actual fertility decisions are still shaped by son preference.
    Keywords: fertility, gender bias, birth spacing, female employment, Bangladesh
    JEL: J11 J13 J16 O12
    Date: 2020–12
  12. By: Kamble, Vaibhav
    Abstract: This paper explores the effect of birth weight on a series of anthropometric outcomes among children. We use a panel of individual-level data from 39 developing countries covering the years 1999-2018 and attempt to solve the Endogeneity using mother fixed effect and twin fixed-effect strategies. The results suggest that improvements in birth weight result in statistically and economically significant improvements in children's anthropometric outcomes. An additional 100 grams birth weight is associated with a 0.43 and 0.25 units increase in weight for age percentile and height for age percentile, respectively. The links are stronger among low educated mothers and poorer households. The observed protective effect of birth weight on infant mortality suggests that the true effects of birth weight on children’s outcomes are larger and that the estimated effects probably understate the true effects.
    Keywords: Health, Fetal Origin Hypothesis, Children Anthropometry, Height for Age, Weight for Age, Birth Weight, Twin Fixed Effect
    JEL: D10 I15 J13 P36
    Date: 2021–01–05
  13. By: Ayenew, Ashenafi Belayneh
    Abstract: This paper examines the welfare impact of hosting refugees in Ethiopia, one of the largest refugee-hosting countries worldwide. The findings reveal different implications depending on the type of household welfare metric. While reducing consumption expenditure per capita and increasing the probability of falling into consumption poverty, it has no effect on wealth and the status of wealth poverty. Decomposing consumption expenditure per capita into food, education, and other non-food components, the results further reveal that it alters the composition of consumption, as it solely affects food consumption expenditure. The consumption effects prevail in rural areas with no effects in urban centers while no heterogeneity is found concerning wealth and wealth poverty results. Key mechanisms explaining the adverse consumption effects include displacement of hosts from salaried employment and a spike in prices of agricultural inputs but not changes in the extent of societal cooperation.
    Keywords: Refugees,Consumption,Wealth,Poverty,Employment,Price,Cooperation
    JEL: O12 O15 E24 Z13
    Date: 2021
  14. By: Karmen Naidoo (University of Massachusetts Amherst, USA); Léonce Ndikumana (University of Massachusetts Amherst, USA)
    Abstract: Several studies have highlighted that African manufacturing wages are higher than countries at similar levels of development, which contributes to the continent’s lower levels of manufacturing competitiveness. This paper derives unit labor costs – average wages relative to productivity – for two-digit manufacturing sectors across a wide range of developed and developing countries over the 1990-2015 period. We benchmark the unit labor costs to China and estimate the relationship between relative unit labor costs and manufacturing sector value added, employment, investment and exports. We find that relative unit labor costs have a smaller effect on manufacturing performance in Africa relative to other developing regions. Further, we find that for Africa, the level and growth of labor productivity have a quantitatively stronger and more robust effect on manufacturing performance than the level and growth of real wages. The results have important implications for industrial policy in African countries.
    Keywords: labor costs; productivity; manufacturing; exports; investment; Africa; China
    JEL: O14 L60 E24 J30
    Date: 2020

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