nep-dev New Economics Papers
on Development
Issue of 2021‒06‒28
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Clientelistic Politics and Pro-Poor Targeting: Rules versus Discretionary Budgets By Dilip Mookherjee; Anusha Nath
  2. Agricultural productivity and land inequality. Evidence from the Philippines By Bequet, Ludovic
  3. Prenatal Exposure to Heat Waves and Child Health in Sub-saharan Africa By Bratti, Massimiliano; Frimpong, Prince Boakye; Russo, Simone
  4. Transitory Income Changes and Consumption Smoothing: Evidence from Mexico By Angelucci, Manuela; Chiapa, Carlos; Prina, Silvia; Rojas, Irvin
  5. Capital Fundamentalism and Structural Transformation By Tohari, Achmad; Parsons, Christopher; Rammohan, Anu
  6. Entitled to Property: Inheritance Laws, Female Bargaining Power, and Child Health in India By Md Shahadath Hossain; Plamen Nikolov
  7. Intrahousehold Resource Allocation and Individual Poverty: Assessing Collective Model Predictions against Direct Evidence on Sharing By Olivier Bargain; Guy Lacroix; Luca Tiberti
  8. Understanding the factors that influence cereal-legume adoption amongst smallholder farmers in Malawi By Nindi, Tabitha
  9. Decomposing Weather Impacts on Crop Profits: the Role of Agrochemical Input Adjustments By Francois Bareille; Raja Chakir
  10. Dietary transition and its relationship with socio-economic status and peri-urban obesity By Purushotham, Anjali; Aiyar, Anaka; von Cramon-Taubadel, Stephan
  11. Between a rock and a hard place: A new perspective on the resource curse By Rabah Arezki; Markus Brueckner
  12. Trade, Value Chain Technology and Prices: Evidence from Dairy in East Africa By Liz Ignowski; Bart Minten; Johan Swinnen; Bjorn Van Campenhout; Senne Vandevelde
  13. Peer Gender and Schooling: Evidence from Ethiopia By Borbely, Daniel; Norris, Jonathan; Romiti, Agnese
  14. Infrastructure development as a prerequisite for structural change in Africa By Yselle F. Malah Kuete; Simplice A. Asongu

  1. By: Dilip Mookherjee; Anusha Nath
    Abstract: Past research has provided evidence of clientelistic politics in delivery of program benefits by local governments (gram panchayats (GPs)), and manipulation of GP program budgets by legislators and elected officials at upper tiers in West Bengal, India. Using household panel survey data spanning 1998-2008, we examine the consequences of clientelism for distributive equity. We find that targeting of anti-poverty programs was progressive both within and across GPs, and is explained by greater 'vote responsiveness' of poor households to receipt of welfare benefits. Across-GP allocations were more progressive than a rule-based formula recommended by the 3rd State Finance Commission (SFC) based on GP demographic characteristics. Moreover, alternative formulae for across-GP budgets obtained by varying weights on GP characteristics used in the SFC formula would have improved pro-poor targeting only marginally. Hence, there is not much scope for improving pro-poor targeting of private benefits by transitioning to formula-based budgeting.
    Keywords: Clientelism; Governance; Targeting; Budgeting
    JEL: H40 H75 H76 O10 P48
    Date: 2021–05–04
  2. By: Bequet, Ludovic
    Abstract: This paper presents the first detailed empirical evaluation of the effect of genetically engineered(GE) crops on land inequality, using three waves of census data covering 21 years and 17 million plots in the Philippines. Exploiting exogenous variations in soil and weather characteristics leading to differences in potential gain from GE corn cultivation, I show that the introduction of this labor- saving technology in 2003 led to an increased in municipality-level landholding and land ownership inequality. This effect is partly driven by a relative increase in agricultural land, is stronger in municipalities that adopted modern agricultural practices later and where credit penetration is higher. While increased land inequality is associated with a higher level of terrorist activity, it does not seem to have any adverse effect on agricultural productivity or economic activity.
    Keywords: Land inequality, Agricultural technology, Land reform
    JEL: O13 Q12 Q15
    Date: 2021–06–10
  3. By: Bratti, Massimiliano (University of Milan); Frimpong, Prince Boakye (Kwame Nkrumah University of Science and Technology); Russo, Simone (Central Bank of Malta)
    Abstract: This paper investigates the consequences of prenatal exposure to hot temperatures on child health in Sub-Saharan Africa (SSA) using a novel indicator of heat waves (the Heat Wave Magnitude Index daily). Leveraging several geo-referenced waves of the Demographic and Health Surveys merged with gridded data on the presence of heat waves and their magnitude since the 1980s, we investigate the effects of inutero exposure to heat waves on several birth and early childhood health outcomes (birth weight, low birth weight, weight-for-age and height-for-age z-scores, undernutrition, severe undernutrition, stunting, severe stunting, anemia). Our analysis demonstrates very robust negative effects on long-term child health, namely the probability that the child is severely stunted. Effects are larger for in-utero shocks experienced in the second and third trimesters of pregnancy and for heat waves of higher intensity. We further show that, at least in the SSA context, adaptation mechanisms such as access to improved water and sanitation, electricity, and improved housing do not appear to significantly attenuate the negative effects of heat waves.
    Keywords: Sub-Saharan Africa, child health, heat waves
    JEL: I14 I15 Q54 J13
    Date: 2021–05
  4. By: Angelucci, Manuela (University of Texas at Austin); Chiapa, Carlos (Analysis Group); Prina, Silvia (Northwestern University); Rojas, Irvin (Centro de Investigación y Docencia Económicas)
    Abstract: We study how 3,534 beneficiaries of PROSPERA, Mexico's cash transfer program, smooth food consumption around the transfer payday, an anticipated and transitory income shock. We find that food consumption and food security do not change around the transfer payday, including for recipients with impatient or time-inconsistent preferences and households with higher than median transfer dependence. Conversely, health and employment shocks (unexpected and less transitory income changes) reduce food security. The transfer's relative illiquidity may act as a commitment device, helping time-inconsistent and less experienced debit card holders smooth consumption.
    Keywords: consumption smoothing, permanent income hypothesis, payday
    JEL: D12 D91 E21 I12 I38
    Date: 2021–06
  5. By: Tohari, Achmad (University of Western Australia); Parsons, Christopher (University of Western Australia); Rammohan, Anu (University of Western Australia)
    Abstract: We revisit the role of Capital Fundamentalism, in the context of the Government of Indonesia's Inpres Desa Tertinggal (IDT or Left Behind Village) Program, which injected capital into poor village economies. We evaluate the impact of the program on village welfare and structural transformation adopting a (fuzzy) regression discontinuity design, which exploits village eligibility for identification. Welfare increased in rural as opposed to urban villages in Java, Sumatra and Bali and Nusa Tenggara, as households exited agriculture in favor of more productive activities in construction, industry and trade. We find no evidence that the program affected structural transformation or welfare in Kalimantan, Sulawesi or Papua, which suggests that structural transformation is a necessary condition for capital injections to foster village development.
    Keywords: capital fundamentalism, structural transformation, government intervention, welfare
    JEL: L16 H53 H54 E22 O10 O18 I38
    Date: 2021–06
  6. By: Md Shahadath Hossain (State University of New York at Binghamton); Plamen Nikolov (State University of New York (at Binghamton))
    Abstract: Child height is a significant predictor of human capital and economic status throughout adulthood. Moreover, non-unitary household models of family behavior posit that an increase in women’s bargaining power can influence child health. We study the effects of an inheritance law change, the Hindu Succession Act Amendment (HSAA), which conferred enhanced inheritance rights to unmarried women in India, on child height. We find robust evidence that the HSAA improved the height and weight of children. In addition, we find evidence consistent with a channel that the policy improved the women’s intrahousehold bargaining power within the household, leading to improved parental investments for children. These study findings are also compatible with the notion that children do better when their mothers control a more significant fraction of the family resources. Therefore, policies that empower women can have additional positive spillovers for children’s human capital.
    Keywords: human capital, height, bargaining, parental investments, developing countries
    JEL: D13 I12 J13 Z13
    Date: 2021–06
  7. By: Olivier Bargain; Guy Lacroix; Luca Tiberti
    Abstract: Welfare analyses conducted by policy practitioners around the world usually rely on equivalized or per-capita expenditures and ignore the extent of within-household inequality. Recent advances in the estimation of collective models suggest ways to retrieve the complete sharing process within families using homogeneity assumptions (typically preferences stability upon exclusive goods across individuals or household types) and the observation of exclusive goods. So far, the prediction of these models has not been validated, essentially because intrahousehold allocation is seldom observed. We provide such a validation by leveraging a unique dataset from Bangladesh, which contains information on the fully individualized expenditures of each family member. We also test the core assumption (efficiency) and homogeneity assumptions used for identification. It turns out that the collective model predicts individual resources reasonably well when using clothing, i.e., one of the rare goods commonly assignable to male, female and children in standard expenditure surveys. It also allows identifying poor individuals in non-poor households while the traditional approach understates poverty among the poorest individuals.
    Keywords: Collective Model, Engel Curves, Rothbarth Method, Sharing rule
    JEL: D11 D12 I31 J12
    Date: 2021
  8. By: Nindi, Tabitha
    Abstract: Although sustainable intensification (SI) practices such as intercropping of cereals with legumes are believed to offer productivity benefits to farmers, the adoption of cereal-legume intercropping remains low in Malawi. We use dynamic programing to assess the impact of four key constraints that smallholder farmers face. These constraints are i) land, ii) labor, ii) input market access and iv) output market access. We use the model to evaluate farmers’ optimal production plans across six scenarios in which these constraints are relaxed and compare their production plans across these scenarios. The farmer’s decision process given these alternative scenarios is modeled to assess the impact of these constraints on SI adoption decisions. Our model preliminary results suggest that both resource (land and labor) and institutional constraints (access to input and output market) play a key role in influencing smallholder farmers’ SI adoption decisions. The model results help to illustrate how labor constraints, land constraints and limited access to input and output market affect smallholders’ adoption of cereal-legume intercropping in Malawi.
    Keywords: MALAWI, SOUTHERN AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, intensification, sustainability, smallholders, farmers, cereals, legumes, dynamic programming, agricultural production, risk, food prices, sustainable intensification, production risk
    Date: 2021
  9. By: Francois Bareille (Paris-Saclay University, INRAE, AgroParisTech, Economie Publique, 78850, Thiverval-Grignon, France); Raja Chakir (Paris-Saclay University, INRAE, AgroParisTech, Economie Publique, 78850, Thiverval-Grignon, France)
    Abstract: The costs of climate change borne by agriculture are critically dependent on farmers’ adaptation. In this paper, we investigate how farmers adjust their input mix in response to weather fluctuations during the growing season using individual panel data from Meuse (France) between 2006 and 2012. Specifically, we consider weather and price information to estimate structural models of profit-maximizing farmers with crop-specific yields and input-crop-specific demand functions, conditionally on farm and annual fixed effects. The results show that weather fluctu-ations affect crop yields but that farmers adapt their fertilizer and pesticide applications. We use our estimates to simulate the impacts of a climate change scenario: we show that farmers in Meuse would increase fertilizer applications by 2.60% but reduce pesticide applications by6.92% under an RCP 4.5 scenario in 2050. These adjustments limit the negative direct impacts of climate change on plant growth, though heterogeneously among crops. In total, the added value of the agricultural sector is likely to reduce by 3.02%. Society could benefit from adaptation as the reduction in damage due to agrochemicals’ negative externalities represents twice the market costs borne by the agricultural sector.
    Keywords: Climate Change, Variable input, Growing season adjustments, Short-term adaptation, Structural econometrics
    JEL: Q12 Q53 Q54
    Date: 2021–06
  10. By: Purushotham, Anjali; Aiyar, Anaka; von Cramon-Taubadel, Stephan
    Abstract: In 2015-16, India was the seventh-largest economy in the world and had more than 200 million people at risk for obesity. Overconsumption of calories from processed foods, an outcome of a country's dietary transition, is known to be an important mechanism that drives risks for obesity. Testing the relationship between processed foods, socio-economic status and obesity has not been possible thus far due to the limited availability of relevant micro-level data. In this paper, we use novel cross-sectional data from a primary socio-economic survey conducted in the rural-urban interface of Bangalore, a mega-city in India, to explore the role of dietary transition in obesity. We show that calories from semi- and ultra-processed foods are positively associated with the prevalence of obesity (Body Mass Index, BMI, =25) among women. Households in the lower-income group are at higher risk of obesity due to excess consumption of calories from semi-processed foods while ultra-processed foods are associated with obesity among higher income groups. We also find that excess consumption of semi-processed food calories is strongly associated with an increase in the prevalence of obesity among women who meet their recommended dietary allowance for calories. This suggests that there is a threshold effect before which consumption of calories from processed foods may improve BMI. Furthermore, in line with the literature, we show that labor-intensive physical activities seem to alleviate the effect of calories on obesity. The strength of the association between semi-processed foods and obesity reduces with occupations association with greater physical activity. Our study highlights how diet-related transitions during economic growth and urbanization impact different economic groups & the dual burden of malnutrition. Our results call for strategic interventions, that are focused on reducing obesity in India, to work on moderating the consumption of semi-processed foods among peri-urban households.
    Keywords: Obesity,dietary transition,structural transformation,rural-urban interface,urbanization,India
    Date: 2021
  11. By: Rabah Arezki; Markus Brueckner
    Abstract: Military expenditure shares significantly affect the relationship between the risk of civil conflict outbreak and natural resources. We show that a significant positive correlation between the risk of civil conflict outbreak and resource rents is limited to countries with low military expenditure shares. In countries with high military expenditure shares there is no significant relationship between the risk of civil conflict outbreak and rents from natural resources. An important message is thus that a conflict resource curse is absent in countries with sufficiently large military expenditure shares. However, there is a trade-off: the larger military expenditure shares, the smaller is the effect that resource rents have on economic growth and democracy.
    Date: 2021–06
  12. By: Liz Ignowski; Bart Minten; Johan Swinnen; Bjorn Van Campenhout; Senne Vandevelde
    Abstract: Agricultural value chains, particularly in the developing world, have been going through drastic changes over the past decades. Differences in world market participation and access to value chain technologies might however have resulted in uneven experiences across countries. In this paper, we explore their impact on prices in the value chain, using the example of two East African countries, Ethiopia and Uganda. We develop a conceptual framework and then validate the model using unique primary price data collected at several levels in the dairy value chains in both countries. We find that prices are overall significantly lower in Uganda than Ethiopia, reflecting their respective net exporting and importing status. Moreover, despite shorter value chains, we find much more significant effects of distances from the capital (the major end destination) on milk prices in Ethiopia than in Uganda. This is seemingly linked to the widespread presence of milk chilling centers in Uganda. While it has been shown that such technology is important for milk quality, we find here that they also have the added benefit to reduce the impact of farmer’s remoteness on prices and therefore allow for more geographically extended value chains.
    Date: 2021
  13. By: Borbely, Daniel (University of Dundee); Norris, Jonathan (University of Strathclyde); Romiti, Agnese (University of Strathclyde)
    Abstract: In this paper, we study how classmate gender composition matters for students in Ethiopia. We base our results on a unique survey of students across classrooms and schools and among those randomly assigned to class. We find a strong asymmetry: males do not and females do benefit from exposure to more female classmates with less school absence and improvement on math test scores. We further find that exposure to more female classmates improves motivation and participation in class, and in general, that the effects of classmate gender composition are consistent with social interaction effects.
    Keywords: peer effects, gender, school performance, Ethiopia
    JEL: I21 I29 J16 J24
    Date: 2021–06
  14. By: Yselle F. Malah Kuete (University of Yaoundé 2, SOA, P.O. Box 1365); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Structural change is seen by development economics theorists as a driver of sustained and sustainable economic growth. African countries that have understood this prioritize structural change policies in their national development programs in order to reduce poverty and promote employment through commodity-based industrialization. How does infrastructure development contribute to this process? The purpose of this paper is to answer this question by examining empirically whether the state of infrastructure development in Africa stimulates structural change, understood as the development of the manufacturing sector. After outlining the state of infrastructure quality in the region, and discussing some theoretical channels through which this relationship might pass, we estimate fixed effects models from 52 African countries over the period 2003-2018. Results which are robust to controlling for institutional dynamics and the natural resource curse hypothesis suggest that structural change in Africa is optimized with the development of infrastructure, particularly energy and information and communication technologies. Among other policy implications arising from these findings, the establishment of partnership projects with other developed countries in terms of superstructure for enhanced industrialization is recommended.
    Keywords: Infrastructure development, structural change, manufacturing sector, Africa
    JEL: N67 N77 C23
    Date: 2021–06

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