nep-dev New Economics Papers
on Development
Issue of 2021‒03‒22
seventeen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The Causal Effect of Transport Infrastructure: Evidence from a New Historical Database By Lindgren, Erik; Pettersson-Lidbom, Per; Tyrefors, Björn
  2. Lost in transition? The persistence of dictatorship mayors By Gonzalez, Felipe; Muñoz, Pablo; Prem, Mounu
  3. Enhancing Human Capital at Scale By Agostinelli, Francesco; Avitabile, Ciro; Bobba, Matteo
  4. A meta-analysis of climate migration literature By Barbora Šedová; Lucia Čizmaziová; Athene Cook
  5. Gender Gaps in Latin American Labor Markets: Implications from an Estimated Search Model By Tejada, Mauricio; Piras, Claudia; Flabbi, Luca; Bustelo, Monserrat
  6. Weapons of the Weak: The Violent Consequences of Biased Technological Change By Dasgupta, Aditya
  7. Why microfinance institutions go digital: An empirical analysis By Gregor Dorfleitner; Davide Forcella; Quynh Anh Nguyen
  8. Anemia, Diet, and Cognitive Development: Impact of Health Information on Diet Quality and Child Nutrition in Rural India By Krämer, Marion; Kumar, Santosh; Vollmer, Sebastian
  9. Constructing a nutrition deficiency index: Applications for the Democratic Republic of the Congo under a decade of humanitarian crises By Mirindi, Patrice L.; Das, Mousumi; Mirindi, Patrick N.; Babu, Suresh Chandra
  10. Crime, Inequality and Subsidized Housing: Evidence from South Africa By Roxana Manea; Patrizio Piraino; Martina Viarengo
  11. Corruption and Access to Socio-Economic Services in Africa By Muhammad Faraz Riaz; Andreas Freytag
  12. Electrification and welfare for the marginalized: Evidence from India By Ashish Kumar Sedai; Tooraj Jamasb; Rabindra Nepal; Ray Miller
  13. Differences in African Banking Systems: Causes and Consequences By Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
  14. Experimental Evidence on Adoption and Impact of the System of rice Intensification By Barrett, Christopher B.; Islam, Asad; Pakrashi, Debayan; Ruthbah, Ummul
  15. Efficiency and profits of emerging medium-scale farms in Africa: Evidence from Ethiopia’s commercial horticultural sector By Bachewe, Fantu Nisrane; Minten, Bart
  16. Labour Participation Decision and Preferences towards Different Employment Status in Response to Remittances: Evidence from the Provincial Capital of Punjab and Khyber Pakhtunkhawa (KPK), Pakistan By Shair, Waqas; Tariq Majeed, Muhammad; Ali, Amjad
  17. The impact of Ethiopia’s direct seed marketing approach on smallholders’ access to seeds, productivity, and commercialization By Mekonnen, Dawit Kelemework; Abate, Gashaw Tadesse; Yimam, Seid; Benfica, Rui; Spielman, David J.; Place, Frank

  1. By: Lindgren, Erik (Dept. of Economics, Stockholm University); Pettersson-Lidbom, Per (Dept. of Economics, Stockholm University); Tyrefors, Björn (Research Institute of Industrial Economics (IFN) and Department of Economics, Stockholm University)
    Abstract: In this paper, we analyze the effect of transport infrastructure investments in railways on three measures of local economic activity: real nonagricultural income, agricultural land values and population size. As a testing ground, we use data from a new historical database that includes annual panel data on approximately 2,400 regions, i.e., local governments, during the period 1860-1917. We use a staggered event study design that is robust to treatment effect heterogeneity. Importantly, we find extremely large reduced-form effects of having access to railways. For real nonagricultural income, the cumulative treatment effect is approximately 120% after 30 years. Therefore, this effect is 20 times larger than most reduced-form effects found in previous works on the effect of transport infrastructure on economic activity. Equally important, we also show that our reduced-form effect reflects growth rather than a reorganization of existing economic activity.
    Keywords: railways; transport infrastructure; real income; land value; event study; treatment heterogeneity
    JEL: H54 L92 N73 O22 R12 R42
    Date: 2021–03–08
  2. By: Gonzalez, Felipe (Pontificia Universidad Católica de Chile); Muñoz, Pablo; Prem, Mounu
    Abstract: We look at Chile’s transition to democracy in 1990 to study the persistence of authoritarian politics at the local level. Using new data on the universe of mayors appointed by the Pinochet dictatorship (1973-1990), and leveraging on the arbitrary election rules that characterized the first local election in 1992, we present two main findings. First, dictatorship mayors obtained a vote premium that is larger among the last wave of incumbents and appears partially explained by an increase in local spending. Second, dictatorship mayors who were democratically elected in 1992 brought votes for the parties that collaborated with the dictatorship in subsequent elections held in democracy. These results show that the body of politicians appointed by a dictatorship can contribute to the persistence of elites and institutions.
    Date: 2021–01–27
  3. By: Agostinelli, Francesco (University of Pennsylvania); Avitabile, Ciro (World Bank); Bobba, Matteo (Toulouse School of Economics)
    Abstract: A two-year randomized evaluation shows that the effectiveness of multi-tasking men- tors on schooling outcomes crucially depends on their training. While a standard training modality in highly marginalized communities in Mexico generates null results, enhanced training yields sizable treatment effects on primary school children's cognitive, behavioral, and educational achievements. This difference cannot be explained by remedial educational activities or pedagogical support, but it can be reconciled with higher parental aspirations and investments. Evidence gathered on the subsequent national roll out of the intervention with enhanced training substantiates the external validity of our findings.
    Keywords: learning outcomes, cognitive achievement, pedagogical practices, parental inputs, scaling-up effects
    JEL: H43 I10 I20 I38
    Date: 2021–03
  4. By: Barbora Šedová (Potsdam Institute for Climate Impact Research (PIK), Mercator Research Institute on Global Commons and Climate Change (MCC), University of Potsdam); Lucia Čizmaziová (Mercator Research Institute on Global Commons and Climate Change (MCC)); Athene Cook (Mercator Research Institute on Global Commons and Climate Change (MCC))
    Abstract: The large literature that aims to find evidence of climate migration delivers mixed findings. This meta-regression analysis i) summarizes direct links between adverse climatic events and migration, ii) maps patterns of climate migration, and iii) explains the variation in outcomes. Using a set of limited dependent variable models, we meta-analyze thus-far the most comprehensive sample of 3,625 estimates from 116 original studies and produce novel insights on climate migration. We find that extremely high temperatures and drying conditions increase migration. We do not find a significant effect of sudden-onset events. Climate migration is most likely to emerge due to contemporaneous events, to originate in rural areas and to take place in middle-income countries, internally, to cities. The likelihood to become trapped in affected areas is higher for women and in low-income countries, particularly in Africa. We uniquely quantify how pitfalls typical for the broader empirical climate impact literature affect climate migration findings. We also find evidence of different publication biases.
    Keywords: migration, climate change, meta-analysis
    JEL: F22 O15 Q54 Q56
    Date: 2021–03
  5. By: Tejada, Mauricio (Universidad Alberto Hurtado); Piras, Claudia (Inter-American Development Bank); Flabbi, Luca (University of North Carolina, Chapel Hill); Bustelo, Monserrat (Inter-American Development Bank)
    Abstract: We develop and estimate a search model that captures the specific characteristics of Latin America and Caribbean (LAC) labor markets and the crucial differences between men and women. Labor force participation decisions are integrated in the labor market dynamics, taking into account sample selection over unobservables. The model is estimated on four LAC countries (Argentina, Chile, Colombia and Mexico) and on three education levels (Primary, Secondary and Tertiary). We use the estimated model to study changes in gender gaps and in output implied by policies that increase the labor force participation of women. We focus on four policies: an increase in the provision of child care, an increase in average female productivity, a gender-based contribution rate for formal employees, and changes in formality and informality costs. We find that the impact on the extensive margin of the female labor supply is the main channel responsible for the policy-induced increase in output.
    Keywords: gender gaps, female labor force participation, labor market frictions, search and matching, Nash bargaining, informality
    JEL: J24 J3 J64 O17
    Date: 2021–03
  6. By: Dasgupta, Aditya
    Abstract: Technological change is typically biased, producing wealth that is distributed unequally across groups in society. When the relative losers of technological change lack the political power needed to pursue redistribution through the political system, they may turn to informal tactics of protest and redistribution, include violence. The argument is applied to the green revolution in India. The spread of a new crop technology, high-yielding variety (HYV) crops, improved agricultural productivity, but also generated rising inequality between landowners and the rural poor. Drawing on a panel dataset linking district-level estimates of HYV crop adoption to digitized crime records, this paper provides evidence that the spread of the new crop technology contributed to an epidemic of dacoity (banditry), an economic crime with elements of social protest against inequality. However, the spread of the new crop technology did not benefit left-wing parties electorally, suggesting that violence was not a precursor to but substitute for redistribution at the ballot box.
    Date: 2021–01–31
  7. By: Gregor Dorfleitner; Davide Forcella; Quynh Anh Nguyen
    Abstract: While the role of digital solutions to foster financial inclusion and the development of the microfinance sector are widely acknowledged, questions concerning the variation in the ability and willingness of microfinance institutions’ (MFIs) adoption of these tools remain unanswered. This paper studies the determinant of the use of digital support solutions in the microfinance sector by using a global sample of MFIs derived from a survey by YAPU Solutions on rural lending and IT solutions. We discover the evidence that suggests the adoption of these tools is consistent with the social performance of MFIs. Furthermore, the results of the study indicate that the profitability of the institutions is associated with a larger application of digital support solutions. Macroeconomic factors, the development of the country in which the institution is located, also impact MFIs’ decisions regarding integrating digital solutions into their services and internal operational processes.
    Keywords: Microfinance institutions; Fintech; Digital solutions; Social performance; Digitization
    JEL: G21 O33
    Date: 2021–03–17
  8. By: Krämer, Marion (German Institute for Development Evaluation); Kumar, Santosh (Sam Houston State University); Vollmer, Sebastian (University of Goettingen)
    Abstract: Lack of information about health risks may limit the adoption of improved nutritional and healthy behavior. This paper studies the effect of a nutrition information intervention on household dietary behavior, hemoglobin levels, and cognitive outcomes of children in rural India. Using experimental data and regression discontinuity design that exploits the exogenous cutoff of hemoglobin level for anemia, we find statistically insignificant treatment effects on dietary improvements, child health, and cognitive outcomes of children. Our findings suggest that light-touch nutrition information alone, even when parents are informed about the health risk of their children, may not promote healthy behavior and factors other than information might constrain households in making nutritional investments for their children.
    Keywords: cognition, anemia, child health, health information, regression discontinuity, India
    Date: 2021–03
  9. By: Mirindi, Patrice L.; Das, Mousumi; Mirindi, Patrick N.; Babu, Suresh Chandra
    Abstract: The Democratic Republic of the Congo (DRC) is perennially plagued by prolonged phases of poverty, conflict, and increased internal migration, as well as pandemic outbreaks such as Ebola and COVID-19, and limited livelihood opportunities. Such unexpected or catastrophic events have rendered households vulnerable and resulted in poor health outcomes. Given this background, we intend to analyze the nutritional profile of households for a period spanning almost a decade using the Household Consumption Expenditure Survey (HCES). We construct a composite nutrition deficiency index (NDI), capturing intake of 14 different macro- and micronutrients (which we refer to as dimensions)—namely, calories, protein, calcium, zinc, folate, thiamine, niacin, iron, vitamin A, vitamin B12, vitamin D, vitamin B6, vitamin C, and vitamin E—using the popular Alkire-Foster methodology. This methodology, usually used to construct multidimensional poverty indexes, in this case helps measure the incidence, intensity, and combined extent of multinutrient deprivation. DRC’s values on the multidimensional NDI vary regionally from 0.13 to 0.73. Urban DRC performs worse than rural DRC. Regions subject to the conflict and Ebola crises are the worst-affected of the nutritionally deprived regions. Deficiency in calorie and protein intake contributes to the highest values of the NDI, but we also find evidence of a double burden of malnutrition, with households lacking consumption of both macro- and micronutrients. South Kivu is the worst-performing of all regions and Mongala the best. The northern parts of DRC have fewer nutritionally deprived households, as compared with the central and southwestern parts. Our main policy recommendation is to help improve market access in urban areas so that people consume a more diverse diet. In rural areas, the government should support improving nutrition-sensitive agricultural production. Although the World Food Programme has a sustained presence in the country, uplifting households from severe hunger, active participation by the government and collaboration with multiple stakeholders is called for.
    Keywords: DEMOCRATIC REPUBLIC OF THE CONGO; CENTRAL AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; nutrition; nutritional status; households; household consumption; household expenditure; expenditure; surveys; crisis; humanitarian crises; nutrition deficiency index; Alkire-Foster methodology
    Date: 2021
  10. By: Roxana Manea; Patrizio Piraino; Martina Viarengo
    Abstract: We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crimes at the police station level with census data. We find that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of one standard deviation in housing inequality explains between 9 and 13 percent of crime increases. Additionally, we show that a prominent post-apartheid housing program for low-income South Africans led to a reduction in inequality and a decline in violent crimes. Together, these findings suggest the important role that equality in housing conditions can play in the reduction of crime in an emerging economy context.
    Keywords: inequality, crime, economic development
    JEL: D63 O10 K14
    Date: 2021
  11. By: Muhammad Faraz Riaz; Andreas Freytag
    Abstract: Corruption is one of the world’s most widespread political problems. It can be found on international, national and sub-national level. Access to education and other socio-economic services is of utmost importance for all humans. It is still not exclusively based on merit, but often rather unfairly distributed and allocated depending on corrupt local bureaucrats. We utilize a micro level measure of corruption based on the personal experiences of individuals, which realistically represents the linkage between individuals and public office holders. For the empirical analysis, we utilized the Afrobarometer survey of 36 African countries that contains information of more than 50,000 citizens. Corruption is found being negatively correlated with the access to water, education, health and paved roads, while positively associated with access to sewage system and having no significant association with access to electricity grid. The findings reveal that in order to expand the access to basic socioeconomic services, governments need to control corruption in public offices on a daily basis.
    Keywords: development, corruption, local services
    JEL: H10 K40 O10 O50 P40
    Date: 2021
  12. By: Ashish Kumar Sedai; Tooraj Jamasb; Rabindra Nepal; Ray Miller
    Abstract: Uneven electrification can be a source of welfare disparity. Given the recent progress of electrification in India, we analyze the differences in access and reliability of electricity, and its impact on household welfare for marginalized and dominant social groups by caste and religion. We carry out longitudinal analysis from a national survey, 2005-2012, using OLS, fixed effects, and panel instrumental variable regressions. Our analysis shows that marginalized groups (Hindu Schedule Caste/Schedule Tribe and Muslims) had higher likelihood of electricity access compared to the dominant groups (Hindu forward castes and Other Backward Caste). In terms of electricity reliability, marginalized groups lost less electricity hours in a day as compared to dominant groups. Results showed that electrification enabled marginalized households to increase their consumption, assets and move out of poverty; the effects were more pronounced in rural areas. The findings are robust to alternative ways of measuring consumption, and use of more recent data set, 2015-2018. We posit that electrification improved the livelihoods of marginalized groups. However, it did not reduce absolute disparities among social groups.
    Keywords: Electricity access, Electricity reliability, Instrumental variables, Marginalized groups, Welfare
    JEL: D12 D31 E12 I32
    Date: 2021–02
  13. By: Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
    Abstract: This paper links banking system development to the colonial and legal history of African countries. Based on a sample of 40 African countries from 2000 to 2018, our empirical findings show a significant dependence of current financial institutions on the inherited legal origin and the colonization type. Findings also reveal that current financial legal institutions are not major determinants of banking system development, and that institutional development and governance quality are more important. A high share of government spending relative to GDP also positively affects banking system development in African countries.
    Keywords: Legal origin,colonial history,financial institutions,banking system,correlated random effects model
    JEL: G21 G38 G39 K15 K40
    Date: 2021
  14. By: Barrett, Christopher B.; Islam, Asad; Pakrashi, Debayan; Ruthbah, Ummul
    Abstract: We report the results of a large-scale, multi-year experimental evaluation of the System of Rice Intensification (SRI), an innovation that first emerged in Madagascar in the 1980s and has now diffused to more than 50 countries. Using a randomized training saturation design, we find that greater cross-sectional or intertemporal intensity of direct or indirect training exposure to SRI has a sizable, positive effect on Bangladeshi farmers’ propensity to adopt (and not to disadopt) SRI. We find large, positive and significant impacts of SRI training on rice yields and profits, as well as multiple household well-being indicators, for both trained and untrained farmers in training villages. Despite the significant farm-level impacts on rice productivity and labor costs, we find no evidence of significant general equilibrium effects on rice prices or wage rates. We also find high rates of disadoption, and clear indications of non-random selection into technology adoption conditional on randomized exposure to training, such that adopters and non-adopters within the same treatment arm experience similar outcomes. Rice yields, profits and household well-being outcomes do not, however, vary at the intensive margin with intensity of training exposure, a finding consistent with multi-object learning models.
    Keywords: Agricultural Finance
    Date: 2021–01–20
  15. By: Bachewe, Fantu Nisrane; Minten, Bart
    Abstract: We study production practices of larger and more capital-intensive farmers (“horti-preneurs”) in horticultural commercial clusters in the central Rift Valley of Ethiopia. Attracted by profitable vegetable markets, more educated farmers rent in land for vegetable production from a large number of smallholders to meet rapidly growing urban vegetable demand. We find that these hortipreneurs obtain more than double the profit per unit of land compared to smallholders. Compared to smallholders, horti-preneurs grow different vegetables – particularly those that require more upfront investments – and in the case that they grow the same crops as smallholders, we find that they use significantly more inputs, such as fertilizer, agro-chemicals, and labor; have higher production costs; and obtain better yields. Moreover, they are also more efficient and able to produce better quality vegetables and obtain better prices. This increasing emergence of more efficient medium-scale farmers in supplying local urban markets challenges the traditional smallholder model in Africa, at least for horticulture.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; medium size farms; farms; horticulture; vegetables; vegetable crops; food production; profit; farmers; food prices; smallholders; irrigation; horticultural sector; vegetable production; vegetable farmers; vegetable prices
    Date: 2021
  16. By: Shair, Waqas; Tariq Majeed, Muhammad; Ali, Amjad
    Abstract: This study has examined the effect of remittances on the labour force participation decisions and preferences of the individuals towards different employment status and work categories. The data from the rural and urban areas of the two provincial capitals of Pakistan has been collected to cover the main range of the topic. The study adds in existing literature the three major implications of labour market outcomes in response to remittances. First, the estimates of the Logit and Probit model suggest that remittances significantly increase the likelihood to not participate in the labour force. In addition, the differential effect of remittances depicts that as monthly remittances increase from 10,000 rupees to 500,000 rupees, the likelihood to participate in labour market decreases from 0.84 to 0.30 respectively. Second, estimates of the multinomial logit model reveal that among different employment categories, remittances increase the likelihood to participate in non-employment. While in case of participation in labour market, they are more likely to prefer full-time self-employment status. Third, estimates of the multinomial logit model depict that among different work professions, remittances increase the likelihood to participate in self-employment and employer profession. The results of the study suggest policy implication on the reallocation of labour from non-employment to self-employment or employer can generate productive outcomes. Furthermore, incentives in the adoption of self-employment and improvement in ease of doing business are essential to spill over the effect of remittances as job creators.
    Keywords: Remittances, Labour Participation, Self-Employment, Wage-Employment
    JEL: C24 F24 J22
    Date: 2021–03
  17. By: Mekonnen, Dawit Kelemework; Abate, Gashaw Tadesse; Yimam, Seid; Benfica, Rui; Spielman, David J.; Place, Frank
    Abstract: Several factors contribute to the low level of improved variety use in Ethiopia. Among those, on the supply side, is the limited availability of seed in the volumes, quality, and timeliness required by farmers, which is partly a result of limited public and private investment in the sector. Beginning in 2011, the Government of Ethiopia introduced a novel experiment-the Direct Seed Marketing (DSM) approach-to reduce some of the centralized, state-run attributes of the country’s seed market and rationalize the use of public resources. DSM was designed to incentivize private and public seed producers to sell seed directly to farmers rather than through the state apparatus. This study is the first quantitative evaluation of DSM’s impact on indicators of a healthy seed system: access to quality seeds, on-farm productivity, and market participation of smallholders. Using a quasi-experimental difference-in-differences approach, the study finds that DSM led to a 26 percent increase in maize yields and a 5 percent increase in the share of maize harvest sold. DSM also led to improvements in seed availability for all three of Ethiopia’s major cereals: maize, wheat, and teff. However, DSM’s effects on yields and share of harvest sold are not statistically significant for wheat and teff. These crop-specific differences in performance are likely explainable by biological differences between hybrid maize and openly pollinated varieties of wheat and teff that incentivize private sector participation in maize seed markets over wheat and teff seed markets. These differences demand different policies and perhaps even institutional approaches to accelerating adoption between hybrids and OPVs.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; seeds; productivity; commercialization; smallholders; maize; marketing; crops; seed production; seed quality; direct seed marketing; seed systems; crop productivity
    Date: 2021

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