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on Development |
| By: | Nicolás de Roux |
| Abstract: | Credit reporting systems have become a widespread tool to assess the creditworthiness of prospective borrowers. This paper studies the implications for credit access of using them in contexts where exogenous and transitory shocks affect income and repayment. Using a novel administrative data set with the near universe of formal loans to coffee producers in Colombia together with data from close to 1,200 rainfall stations, I show that transitory weather shocks lead to lower rates of loan repayment, lower credit scores, and more frequent denials of future loan applications. I present evidence that affected producers' incomes and ability to repay recover more quickly from shocks than credit access. This implies that these producers become credit constrained despite their ability to repay a loan. Insurance, contingency-dependent repayment schemes, or the inclusion of information on exogenous shocks in credit scoring models have the potential to alleviate the problem. |
| Keywords: | Shocks, Credit Reports, Access to Credit |
| JEL: | G21 O12 O13 Q12 Q14 Q54 |
| Date: | 2021–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:019769&r= |
| By: | Bahia, Kalvin (GSMA); Castells, Pau (GSMA); Cruz, Genaro (GSMA); Masaki, Takaaki (World Bank); Rodriguez Castelan, Carlos (World Bank); Sanfelice, Viviane (Temple University) |
| Abstract: | What are the impacts of expanding mobile broadband coverage on poverty, household consumption and labor market outcomes in developing countries? Who benefits from improved coverage of mobile internet? To respond to these questions, this paper applies a difference-in-differences estimation using panel household survey data combined with geospatial information on the rollout of mobile broadband coverage in Tanzania. The results reveal that being covered by 3G networks has a large positive effect on total household consumption and poverty reduction, driven by positive impacts on labor market outcomes. Working age individuals living in areas covered by mobile internet witnessed an increase in labor force participation, wage employment, and non-farm self-employment, and a decline in farm employment. These effects vary by age, gender and skill level. Younger and more skilled men benefit the most through higher labor force participation and wage employment, while high-skilled women benefit from transitions from self-employed farm work into non-farm employment. |
| Keywords: | Africa, consumption, labor force participation, welfare, Tanzania |
| JEL: | F63 I31 L86 O12 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14720&r= |
| By: | Leandro Medina; Mr. Andrea Gamba; Gareth Anderson; Paolo Galang; Tianxiao Zheng |
| Abstract: | This paper assess how priorities of the IMF’s membership have evolved over the past two decades, by using text mining techniques on a unique dataset combining IMFC communiqués and constituency statements. Our results reveal significant variation in priorities across time and constituencies. Statements can be characterized by the weight which they place on three key priorities: (i) growth; (ii) debt and development; and (iii) crisis management and quota reform. Sentiment analysis techniques also show that addressing climate change is a topic which is viewed positively by an increasing number of constituencies. |
| Keywords: | IMFC communiqué; constituency statement; IMF priority; constituency cluster; sentiment analysis technique; Climate change; Mining sector; Global financial crisis of 2008-2009; Crisis management; Global |
| Date: | 2021–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/159&r= |
| By: | Nikolay Gueorguiev; Mr. Kenji Moriyama; Mr. Jiro Honda; Keyra Primus; Mouhamadou Sy; Olusegun Ayodele Akanbi; Paulomi Mehta |
| Abstract: | High persistence of state fragility (a fragility trap) suggests the presence of substantial benefits from avoiding a fall into fragility and considerable hurdles to successful exit from fragility. This paper empirically examines the factors that affect the turning points of entering and exiting from state fragility by employing three different approaches: an event study, the synthetic control method, and a logit model. We find that avoiding economic contraction is critical to prevent a country on the brink of fragility from falling into fragility (e.g., among near fragile countries, the probability of entering fragility would rise by 40 percentage points should real GDP per capita growth decline from +2.5 percent to -2.5 percent). Also, strengthening government effectiveness together with increasing political inclusion and maintaining robust economic activity should help make exit from fragility more successful and sustainable. In the current environment (the COVID-19 crisis and its aftermath), the findings suggest the importance of providing well-directed fiscal stimulus with sufficient financing, (subject to appropriate governance safeguards and well-designed policies), and protecting critical socio-economic spending to keep vulnerable countries away from being caught in a fragility trap. |
| Keywords: | State fragility; government effectiveness; A. event study analysis; exit from fragility; effectiveness result; Logit models; Education spending; Health care spending; Income; Sub-Saharan Africa; Global |
| Date: | 2021–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/133&r= |
| By: | Ms. Sumiko Ogawa; Purva Khera; Miss Stephanie Y Ng; Ms. Ratna Sahay |
| Abstract: | Digital financial services have been a key driver of financial inclusion in recent years. While there is evidence that financial inclusion through traditional services has a positive impact on economic growth, do the same results carry over for digital financial inclusion? What drives digital financial inclusion? Why does it advance more in some countries but not in others? Using new indices of financial inclusion developed in Khera et. al. (2021), this paper addresses these questions for 52 developing countries. Using cross-sectional instrument variable procedure, we find that the exogenous component of digital financial inclusion is positively associated with growth in GDP per capita during 2011-2018, which suggests that digital financial inclusion can accelerate economic growth. Fractional logit and random effects empirical estimation identifies access to infrastructure, financial and digital literacy, and quality of institutions as key drivers of digital financial inclusion. These findings are then used to help inform policy recommendations in areas related to the digitization of financial services to promote financial inclusion. |
| Keywords: | A. literature review; digitization of financial services; capital markets department; growth rate; Digital financial services; number in bracket; regression equation; Financial inclusion; Mobile banking; Middle East and Central Asia; Caribbean; Asia and Pacific |
| Date: | 2021–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/167&r= |
| By: | Hailemariam Ayalew (Department of Economics, Trinity College Dublin and International Maize and Wheat Improvement Center (CIMMYT), Ethiopia); Chamberlin Jordan (International Maize and Wheat Improvement Center (CIMMYT), Kenya); Carol Newman (Department of Economics, Trinity College Dublin) |
| Abstract: | Smallholder farmers in Africa typically only have access to blanket fertilizer recommendations which may not be optimal for local production conditions. The response to such recommendations has generally been poor. Using a randomized control trial in Ethiopia, we explore whether targeted recommendations lead farmers to align fertilizer usage to recommended levels and whether this impacts productivity. Results show that targeted recommendations closed the gap between the he recommended and actual amounts of fertilizer used and that this in turn increased productivity. We also consider whether coupling these recommendations with agricultural insurance further encourages fertilizer investment but find no differential effect. |
| Keywords: | advisory services, smallholder agriculture, agricultural extension, ICT, fertilizer, agriculture |
| JEL: | O12 O13 Q12 Q16 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0620&r= |
| By: | Lei Wang; Yiwei Qian; Nele Warrinnier; Orazio Attanasio; Scott Rozelle; Sean Sylvia |
| Abstract: | We present evidence from a randomized experiment testing the impacts of a six-month early childhood home-visiting program on child outcomes at school entry. Two and a half years after completion of the program, we find persistent effects on child working memory - a key skill of executive functioning that plays a central role in children’s development of cognitive and socio-emotional skills. We also find that the program had persistent effects on parental time investments and preschool enrolment decisions. Children were enrolled earlier and in higher quality preschools, the latter reflecting a shift in preferences over preschool attributes toward quality. Our findings imply an important role for the availability of high-quality subsequent schooling in sustaining the impacts of early intervention programs. |
| Keywords: | Early Childhood Development, Parenting, China, Poverty |
| JEL: | J13 I21 I28 H11 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:42721&r= |
| By: | Grogan, Louise (University of Guelph) |
| Abstract: | The dissolution of the Soviet Union and 1992-96 Tajik civil war resulted in huge human and economic losses. Nevertheless, contemporary data suggest the persistence of investments in human capital in the region most affected by famine and least favoured since the cessation of hostilities, Gorno-Badakhshan Autonomous Oblast. Famine-affected women have greater stature and final educational attainment, later ages at marriage and lower fertility than do those in the neighbouring border province, Khatlon. Educational interactions between adults and children under age six are much more frequent. The continued emphasis on human capital after economic collapse is consistent with a locational imperative for households to earn incomes outside of agriculture, and with a higher relative status of women in non-agrarian societies. |
| Keywords: | food security, anthropometry, schooling, child mortality, early childhood education, civil war, Tajikistan |
| JEL: | H4 J1 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14775&r= |
| By: | Mr. Jochen R. Andritzky; Ke Wang; Zsuzsa Munkacsi |
| Abstract: | Structural conditionality of IMF-supported programs is designed to support structural reforms by countries borrowing from the IMF. Taking stock of program conditions and their implementation, this paper finds that conditionality focuses on fiscal, monetary and financial issues—areas where IMF expertise is strong—and shies away from structural areas such as labor or product market reforms. Hence, tackling deep-rooted structural issues during IMF-supported programs often remained elusive. To ensure countries gain most from IMF conditionality, the paper outlines an evaluation matrix for prioritizing and designing structural reforms, and applies it to case studies. |
| Date: | 2021–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/139&r= |
| By: | Mr. Shekhar Aiyar; Manasa Patnam |
| Abstract: | This paper examines whether IMF lending is associated with increases in outflows to offshore financial centers (OFCs), known for bank secrecy and asset protection, relative to other international destinations. Using quarterly data from the BIS on bilateral bank deposits, we are unable to detect any positive and statistically significant effect of IMF loan disbursements on bank deposits in OFCs. The result holds even after restricting the sample to the duration of the IMF program, where disbursement quarters and non-disbursement quarters should be subject to similar degrees of macroeconomic stress. It is also robust to using the scheduled tranche of disbursements as an instrument for actual disbursements. While the effects vary by the type and conditionality of the IMF program, as well as the amount of lending, none of the effects are found to be positive and statistically significant. We also estimate whether the recent surge in emergency lending, during the Covid-19 crisis, is associated with an increase in outflows to OFCs but find no evidence to support this. |
| Keywords: | IMF loan disbursement; IMF disbursement; disbursement quarter; IMF emergency lending; IMF loan tranche; IMF aid disbursement; Offshore financial centers; Corruption; Loans; Bank credit; Global |
| Date: | 2021–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/146&r= |
| By: | Cameron, Lisa A. (University of Melbourne); Meng, Xin (Australian National University); Zhang, Dandan (Peking University) |
| Abstract: | Large scale rural-to-urban migration and China's household registration system have resulted in about 61 million children being left-behind in rural villages when their parents migrate to the cities. This paper uses survey and experimental data from male rural-urban migrants – prison inmates and comparable non-inmates – to examine whether parental absence in childhood as a result of migration is associated with increased criminality in adulthood. Control functions and sibling fixed effects are used to identify causal impacts. Parental absence due to migration is found to increase the propensity of adult males to commit crimes. Being left-behind decreases educational attainment and increases risk-loving behavior, both of which increase criminality. |
| Keywords: | migration, crime, China |
| JEL: | O12 O15 J12 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14774&r= |
| By: | Syed Muhammad All-E-Raza Rizvi (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Marie-Ange Véganzonès-Varoudakis (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | In this article, we use Poisson fixed-effect regressions (FEPR) with robust standard errors and instrumental variables (IV) to study the economic, social and institutional determinants of internal conflicts in 58 fragile states over the period 2004 to 2017. We show that effective institutions (measured by judicial efficiency) and higher incomes could help reduce conflict in fragile states. In contrast, democratic institutions do not seem to mitigate violence in these countries. It also appears that education and trade liberalization can fuel conflict in a some cases. These results imply that education and trade reforms are not having the expected effects in fragile countries, which should first improve the social, economic and institutional conditions of their populations before enjoying the fruits of reforms and education. This may be the case for political reforms, as democratic experiences seem to lead to an increase in violence in some countries in our sample. |
| Keywords: | JEL classification: C23,Democracy,Institutions,Education,Economic Reforms,Fragile Countries,Conflict,D74,O10 |
| Date: | 2021–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03378768&r= |
| By: | Moore, Mick |
| Abstract: | There is a widespread perception that taxing in sub-Saharan Africa has been and remains fraught with problems or government failure. This is not generally true. For more than a century, colonial administrations and independent states have steadily developed the capacity to routinely collect more substantial revenues than one might expect in a low-income region. The two main historical dimensions of this collection capacity were (a) powerful, centralized bureaucracies focused on achieving revenue collection targets and (b) large, taxable international trade sectors. In recent decades, those centralized bureaucracies have to some extent been reformed such that in structure and procedure they resemble more closely tax administrations in OECD countries. More strikingly, nearly all states have adopted VAT and found it to be a very powerful revenue collection instrument. However, the tax share of GDP has been broadly constant for several decades, and it will be hard to increase it. It is difficult for African governments to effectively tax transnational corporations, especially in the mining and energy sectors, which are of growing importance. Tax administrations continue to approach richer Africans with a light touch, and to exaggerate the potential for taxing small-scale (‘informal’) enterprises. The revenue operations of sub-national governments are often opaque. Ordinary people often pay large sums in ‘informal taxes’ that are generally regressive in impact. And the standard direction of travel in the reform of tax policy and administration is not appropriate to those large areas, especially in the Sahel, that are afflicted by internal and cross-border armed conflicts. |
| Keywords: | Governance, |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:idq:ictduk:16977&r= |
| By: | Nicola Amendola (CEIS & DEF, University of Rome "Tor Vergata"); Giacomo Gabbuti (St.Antony’s College, University of Oxford); Giovanni Vecchi (CEIS & DEF, University of Rome "Tor Vergata") |
| Abstract: | We argue against the use of composite indices, such as the Human Development Index (HDI), in economic history. We show that the HDI can be interpreted as a formal representation of the analyst’s ethical system. We support our claim by introducing a new class of paternalistic social welfare functions (Graaff 1957, Mas-Colell, 1995) which encompasses all the HDI formulas put forth by the literature. The theoretical framework is illustrated by an empirical investigation of the long-run evolution of Italians’ living standards and civic liberties. We conclude that any history based on composite indices is one where both data and history play a minor role, if any. |
| Keywords: | Human development index,Economic wellbeing,Composite indices,Living standards,CES,Social welfare functions,Italy |
| JEL: | N01 N3 O15 |
| Date: | 2021–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:527&r= |