nep-dev New Economics Papers
on Development
Issue of 2021‒02‒22
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. International Trade in rough diamonds and the Kimberley Process Certification Scheme By Stefan Borsky; Andrea Leiter
  2. Role of income inequality in shaping outcomes on individual food insecurity By Holleman, C.; Conti, V.
  3. Conditional cash transfers and the learning crisis: evidence from Tayssir scale-up in Morocco By Jules Gazeaud; Claire Ricard
  4. Altruism or Money? Reducing Teacher Sorting Using Behavioral Strategies in Peru By Ajzenman, Nicolas; Bertoni, Eleonora; Elacqua, Gregory; Marotta, Luana; Méndez Vargas, Carolina
  5. Learning about Farming: Innovation and Social Networks in a Resettled Community in Brazil By Comola, Margherita; Inguaggiato, Carla; Mendola, Mariapia
  6. Land scarcity impedes sustainable input intensification in smallholder irrigated agriculture: Evidence from Egypt By Abay, Kibrom A.; El-Enbaby, Hoda; Abdelfattah, Lina; Breisinger, Clemens
  7. Managing the Impact of Climate on Migration: Evidence from Mexico By Isabelle Chort; Maëlys de la Rupelle
  8. Managing Migration Flows Through Foreign Aid By Marchal, Léa; Naiditch, Claire; Simsek, Betül
  9. Adapting to high temperatures: evidence on the impacts of sustainable agricultural practices in Uganda By Ignaciuk, A.; Maggio, G.; Mastrorillo, M.; Sitko, N.
  10. Impacts of Natural Disasters on Households and Small Businesses in India By Patankar, Archana
  11. The Effects of Land Markets on Resource Allocation and Agricultural Productivity By Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
  12. Generalised Trust and Relation Centrism for Corruption: Evidence from Low- and Middle-Income Countries. By Tolu Olarewaju; Jagannadha Pawan Tamvada; Sharin McDowall

  1. By: Stefan Borsky (University of Graz); Andrea Leiter (University of Innsbruck)
    Abstract: In 2003, the Kimberley Process Certification Scheme (KPCS) went into force to stop the trade in those diamonds, directly linked to the fueling of armed conflict and activities of rebel movements, also known as conflict diamonds. This article gives empirical evidence on the impact of the KPCS on international trade in rough diamonds. We find that bilateral KPCS participation facilitates access to international markets for rough diamonds and increases trade values. The bilateral trade impact of the KPCS does not depend on the exporters' economic development nor the extent of market access. A more detailed analysis of exporters' heterogeneity in trade values shows that unilaterally KPCS intensifies the trade impediments resulting from armed conflicts and, thereby, reduces the scale of potential conflict diamonds traded internationally. We further offer evidence that the KPCS-induced trade effects apply not only to exporter- or importer-hubs but equally to smaller trade partners. Our analysis gives insights into how agreements setting a particular standard may affect international trade patterns in conflict minerals.
    Keywords: International product standards; conflict diamonds; international trade; gravity model.
    JEL: F53 Q34 Q37 Q56 L15
    Date: 2021–02
  2. By: Holleman, C.; Conti, V.
    Abstract: Background paper for The State of Food Security and Nutrition in the World 2019 – Despite relatively high economic growth rates in many developing countries in the last two decades, income inequality has remained high and even increased. This has important policy implications as high-income inequality undercuts the benefits of economic growth in reducing food insecurity. This paper uses the 2014 Gallup World Poll (GWP) dataset of individual food insecurity based on the Food Insecurity Experience Scale (FIES) and employs a three-level linear probability model to assess the macro-economic effects of economic growth and income inequality on individual food insecurity. Results show that increases in the gross domestic product (GDP) per capita are concurrent with declines in individual food insecurity. The findings suggest that by tackling income inequality, economic growth can become a force for reducing food insecurity, especially in low- and middle-income countries.
    Keywords: Agricultural and Food Policy, Food Security and Poverty
    Date: 2020–11–17
  3. By: Jules Gazeaud; Claire Ricard
    Abstract: We use a regression discontinuity design in rural Morocco to study whether the enrollment gains from conditional cash transfer programs translate into learning benefits. Unlike most previous studies, we estimate the effects of a sustained exposure during whole primary school. We find small and seemingly negative effects on test scores at the end-of-primary school exam. Concomitant increases in class size suggest that the program constrained learning by putting additional pressure on existing resources in beneficiary areas. These results are particularly relevant for settings where transfers are geographically targeted with no measures to absorb the extra influx of students.
    Keywords: Conditional cash transfers, learning outcomes, program scaleup, Morocco, Tayssir
    JEL: I21 I38 J24 O12 O15
    Date: 2021
  4. By: Ajzenman, Nicolas (São Paulo School of Economics-FGV); Bertoni, Eleonora (Inter-American Development Bank); Elacqua, Gregory (Inter-American Development Bank); Marotta, Luana (Inter-American Development Bank); Méndez Vargas, Carolina (Inter-American Development Bank)
    Abstract: Inequality in access to high-quality teachers is an important driver of student socioeconomic achievement gaps. We experimentally evaluate a novel nation-wide low-cost government program aimed at reducing teacher sorting. Specifically, we tested two behavioral strategies designed to motivate teachers to apply to job vacancies in disadvantaged schools. These strategies consisted of an "Altruistic Identity" treatment arm, which primed teachers' altruistic identity by making it more salient, and an "Extrinsic Incentives" arm, which simplified the information and increased the salience of an existing government monetary-incentive scheme rewarding teachers who work in underprivileged institutions. We show that both strategies are successful in triggering teacher candidates to apply to such vacancies, as well as make them more likely to be assigned to a final in-person evaluation in a disadvantaged school. The effect among high-performing teachers is larger, especially in the "Altruistic" arm. Our results imply that low-cost behavioral strategies can enhance the supply and quality of professionals willing to teach in high-need areas.
    Keywords: identity, monetary incentives, priming, altruism, prosocial behavior, teacher sorting
    JEL: I24 D91 I25
    Date: 2021–02
  5. By: Comola, Margherita (Paris School of Economics); Inguaggiato, Carla (University of Bern); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: We study the role of social learning in the diffusion of cash crops in a resettled village economy in northeastern Brazil. We combine detailed geo-coded data on farming plots with dyadic data on social ties among settlers, and we leverage natural exogenous variation in network formation induced by the land occupation movement and the agrarian reform. By using longitudinal data on farming decisions over 15 years we find consistent evidence of significant peer effects in the decision to farm new cash fruits (pineapple and passion fruit). Our results suggest that social diffusion is heterogeneous along observed plot and crop characteristics, i.e. farmers growing water-sensitive crop are more likely to respond to the actions of peers with similar water access conditions.
    Keywords: technology adoption, agrarian reform, social networks, peer effects, Brazil
    JEL: C45 D85 J15 O33 Q15
    Date: 2021–02
  6. By: Abay, Kibrom A.; El-Enbaby, Hoda; Abdelfattah, Lina; Breisinger, Clemens
    Abstract: Increasing population pressure and population density in many African countries are inducing land scarcity and land constraints. These increasing land constraints are expected to trigger various responses and adaptation strategies, including agricultural intensification induced by land scarcity, as postulated by the Boserup hypothesis. However, most empirical evaluations of the Boserup hypothesis come from rainfed agriculture and mostly from Sub-Saharan Africa (SSA), where application of improved agricultural inputs remains historically low. Agricultural intensification practices as well as the relevance of the Boserup hypothesis in irrigated agriculture and in contexts where application of improved inputs is high remains unexplored. Furthermore, while much of the debate on the topic in Africa has focused on how to boost agricultural intensification, there is scant evidence on whether evolving agricultural intensification practices in some parts of Africa are sustainable, yield-enhancing, and optimal. In this paper we investigate the implication of land scarcity on agricultural intensification and the relevance of the Boserup hypothesis in the context of Egypt, where agriculture is dominated by irrigation and input application rates are much higher than SSA. We also examine whether evolving agricultural intensification practices induced by land scarcity are agronomically appropriate and yield-enhancing. We find that land scarcity induces higher application of agricultural inputs, mainly nitrogen fertilizers, sometimes beyond the level that is agronomically recommended. More importantly, land scarcity increases overapplication of nitrogen fertilizer relative to crop-specific agronomic recommendations. This implies that land constraints remain as important challenges for sustainable agricultural intensification. Finally, we find suggestive evidence that such overapplication of nitrogen fertilizers is not yield-enhancing, but, rather, yield-reducing. We also document that land scarcity impedes mechanization of agriculture. Our findings have important implications to inform appropriate farm management and sustainable intensification practices. Furthermore, our results can inform long-term policy responses to land scarcity.
    Keywords: EGYPT, ARAB COUNTRIES, MIDDLE EAST, NORTH AFRICA, land resources, sustainability, smallholders, irrigated farming, agriculture, farming systems, intensification, land scarcity
    Date: 2021
  7. By: Isabelle Chort; Maëlys de la Rupelle (Université de Cergy-Pontoise, THEMA)
    Abstract: While there is a growing literature on the impact of climate and weather-related events on migration, little is known about the mitigating effect of different policies directed to the agricultural sector, or aimed at insuring against environmental disasters. This paper uses state-level data on migration ows between Mexico and the U.S. from 1999 to 2012 to investigate the migration response to weather shocks and the mitigating impact of an agricultural cash-transfer program (PROCAMPO) and a disaster fund (Fonden). We find that Fonden decreases migration in response to heavy rainfall, hurricanes and droughts. Increases in PROCAMPO amounts paid to small producers are found to play an additional, though more limited, role in limiting the migration response to shocks. Changes in the distribution of PROCAMPO favoring more vulnerable producers in the non irrigated ejido sector also seem to mitigate the impact of droughts on migration.
    Keywords: International migration, Weather shocks, Public policies, Weather variability, Natural disasters, Mexico-U.S. migration, Inequality
    JEL: F22 Q54 Q18 J61
    Date: 2021
  8. By: Marchal, Léa; Naiditch, Claire; Simsek, Betül
    Abstract: This paper investigates through which channels foreign aid impacts migration to donor countries. To disentangle the non-donor-specific channels (development and credit constraint channels) from the donor-specific channels (information and instrumentation channels), we use the fact that multilateral aid is not donor-specific contrary to bilateral aid. We estimate a gravity model derived from a RUM model of migration using an IV-2SLS strategy and the DEMIG-C2C and AidData datasets. We find that aid donated by a country increases migration to that donor through an information channel and especially for the poorest recipient countries. In addition, we find that aid weakly reduces migration to any country via a development channel.
    Keywords: Aid,Gravity,Migration
    JEL: F22 F35 O15
    Date: 2021
  9. By: Ignaciuk, A.; Maggio, G.; Mastrorillo, M.; Sitko, N.
    Abstract: Rising temperatures due to climate change pose a significant threat to agricultural systems and the livelihoods of farmers across the globe. Identifying farm management strategies that reduce sensitivity to high temperatures is, therefore, critical for moderating the adverse effects of climate change. In this paper, we use spatially granular climate data merged with four waves of household survey data in Uganda to examine empirically the relationships between high temperatures, agricultural production outcomes, and the adoption (including its duration) of three sustainable agricultural practices (organic fertilizer adoption, banana-coffee intercropping and cereal-legume intercropping). We do this using a fixed-effect model, with instrumental variables to address potential endogeneity issues. Our findings indicate that, while exposure to high temperature does reduce farmers’ crop income, the adoption of these practices can offset the negative impact of high temperatures on such income. Indeed, we show that the benefits of adopting these practices on the total value of crop production increases monotonically astemperatures increase from their long-term averages. Moreover, the number of years a farmer adopts a practice is associated with higher total value of crop production, and this relationship holds across the full distribution of observed high temperature deviations. Taken together, the results suggest that organic fertilizer adoption, banana-coffee intercropping and cereal-legume intercropping are effective options to adapt to rising temperatures in Uganda, and these benefits increase with the duration of adoption. Adaptation policies and programmes must therefore be designed in ways that help farmers overcome initial barriers to adoption of these practices, as well as to support farmers to sustain adoption over time. This may require longer term funding horizons for adaptation programmes, and innovative support mechanisms to incentivize sustained adoption.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Crop Production/Industries
    Date: 2021–02–18
  10. By: Patankar, Archana (Green Globe Consultancy)
    Abstract: Extreme precipitation and flooding cause large-scale impacts on people, and are further intensified by rapid urbanization, infrastructure expansion, and large numbers of people residing in informal settlements in destitute conditions. This underscores the need to characterize the impacts of extreme precipitation on different stakeholders and help formulate policies and plans to mitigate them. The focus of this paper is on characterizing and analyzing the impacts of extreme precipitation events at the micro level on vulnerable households and small and medium-sized enterprises in three locations in India: Mumbai, Chennai, and Puri district. These areas have faced devastating extreme rainfall events in recent years and offer critical insights into asset the exposure of, and direct and indirect impacts on, urban and rural entities. The flood impact analysis in this paper provides a multidimensional view with quantitative damage estimates and qualitative insights into the devastation and distress caused. It also highlights the heterogeneity of flood impacts and the potential to push the poor into a debt trap and further poverty.
    Keywords: disaster risk management; extreme events; flooding; household survey; urban poverty
    JEL: I32 I38 Q54 Q56
    Date: 2019–12–23
  11. By: Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
    Abstract: We assess the effects of land markets on misallocation and productivity both empirically and quantitatively. Exploiting variation from a land certification reform across time and space in Ethiopia, we find that certification facilitates rentals and improves agricultural productivity. We calibrate a quantitative macroeconomic model with heterogeneous household farms facing institutional costs to land markets using the micro panel data. The effect of a counterfactual reallocation from no rentals to efficient rentals increases zone-level agricultural productivity by 43 percent on average. While our estimated institutional costs are strongly associated with land certification across zones, there are nontrivial residual frictions to rental market activity, implying that land certification only partially captures the overall effects of rentals. A full certification reform accounts for just one-fourth of the overall productivity gains from land rentals. This result highlights the importance of comprehensive reforms alleviating frictions to land transactions beyond the granting of certificates.
    Keywords: Land, Markets, Rentals, Misallocation, Productivity, Inequality, Panel Data.
    JEL: E02 O10 O11 O13 O43 O55 Q15 Q18 Q24
    Date: 2021–02–06
  12. By: Tolu Olarewaju (Staffordshire University); Jagannadha Pawan Tamvada (University of Southampton); Sharin McDowall (University of Birmingham)
    Abstract: We investigate the role of generalised trust and relation centrism for corruption as perceived by firms. The empirical analysis on 16,785 firms from 20 lower- and middle- income countries suggests that higher levels of friend centrism in society has a significantly negative relationship with corruption, while higher levels of generalised trust and family centrism have a significantly positive relationship with it. Overall, the empirical results demonstrate that corruption thrives in the presence of stronger family ties and more generalised trust in lower- and middle-income countries but is less of an obstacle in the presence of medium friend ties.
    Keywords: Trust, Relation Centrism, Corruption
    Date: 2021–02

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