nep-dev New Economics Papers
on Development
Issue of 2021‒12‒20
seventeen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Inadequate Teacher Content Knowledge and What to Do About It: Evidence from El Salvador By Aymo Brunetti; Konstantin Büchel; Martina Jakob; Ben Jann; Daniel Steffen
  2. The Heavy Economic Toll of Gender-based Violence: Evidence from Sub-Saharan Africa By Mr. David Stenzel; Rasmane Ouedraogo
  3. Vulnerability to climate change and communal conflicts: evidence from Sub-Saharan Africa and South/South-East Asia By Sara Balestri; Raul Caruso
  4. Industrialization in developing countries: is it related to poverty reduction? By Abdul A. Erumban; Gaaitzen de Vries
  5. Inequality, living standards, and growth: two centuries of economic development in Mexico† By Bleynat, Ingrid; Challú, Amílcar E.; Segal, Paul
  6. The Poverty-Adjusted Life Expectancy index: a consistent aggregation of the quantity and the quality of life By Jean-Marie Baland; Guilhem Cassan; Benoit Decerf
  7. Effective Foreign Aid: Evidence from Gavi’s Vaccine Program By Gauri Kartini Shastry; Daniel L Tortorice
  8. Agricultural Export, Growth and the Poor in Africa: A Meta Analysis By David Adeabah; Simplice A. Asongu
  9. Childhood Determinants of Internal Youth Migration in Senegal By Herrera, Catalina; Sahn, David E.
  10. The determinants of electricity constraints by firms in developing countries By Elizabeth Asiedu; Théophile Azomahou; Neepa Gaekwad; Mahamady Ouedraogo
  11. Tax Treaties and Enterprise Outcomes: Evidence Across Developing African Countries By Efobi, Uchenna; Adejumo, Oluwabunmi O.
  12. Pro-poorness of Rural Economic Growth and the Roles of Education in Bhutan, 2007 - 2017 By Takahiro Akita; Dorji Lethro
  13. The Foreign Direct Investment Job Multiplier During a Resource Boom: Evidence from Mongolia By Sayour, Nagham; Schröder, Marcel
  14. Role of Individual Characteristics and Policies in Driving Labor Informality in Vietnam By Mr. Giovanni Ganelli; Anh Thi Ngoc Nguyen; Ms. Era Dabla-Norris
  15. Intrahousehold food intake inequality by family roles and age groups By Mst Asma Khatun; Koji Kotani
  16. Equivalence Scales with Endogeneity and Base Independence By Steven F. Koch
  17. Third-Party Interest, Resource Value, and the Likelihood of Con?ict By Giacomo Battiston; Matteo Bizzarri; Riccardo Franceschin

  1. By: Aymo Brunetti; Konstantin Büchel; Martina Jakob; Ben Jann; Daniel Steffen
    Abstract: Good teachers are the backbone of a successful education system. Yet, in developing countries, teachers' content knowledge is often inadequate. This study documents that primary school math teachers in the department of Morazan in El Salvador only master 47 percent of the curriculum they teach. In a randomized controlled trial with 175 teachers, we further evaluate a computer-assisted learning (CAL) approach to address this shortcoming. After a ve months in-service training combining CAL-based self-studying with monthly workshops, participating teachers outperformed their peers from the control group by 0.29, but this e ect depreciated by 72 percent within one year. Our simulations show that the program is unlikely to be as cost-e ective as CAL interventions directly targeting students.
    Keywords: Education quality, teacher performance, teacher training, student learning, basic math education, computer-assisted learning
    JEL: C93 I20 I21 I28 O15
    Date: 2021–12
  2. By: Mr. David Stenzel; Rasmane Ouedraogo
    Abstract: The COVID-19 pandemic and lockdowns have led to a rise in gender-based violence. In this paper, we explore the economic consequences of violence against women in sub-Saharan Africa using large demographic and health survey data collected pre-pandemic. Relying on a two-stage least square method to address endogeneity, we find that an increase in the share of women subject to violence by 1 percentage point can reduce economic activities (as proxied by nightlights) by up to 8 percent. This economic cost results from a significant drop in female employment. Our results also show that violence against women is more detrimental to economic development in countries without protective laws against domestic violence, in natural resource rich countries, in countries where women are deprived of decision-making power and during economic downturns. Beyond the moral imperative, the findings highlight the importance of combating violence against women from an economic standpoint, particularly by reinforcing laws against domestic violence and strengthening women’s decision-making power.
    Keywords: Gender-based violence, economic development, sub-Saharan Africa
    Date: 2021–11–19
  3. By: Sara Balestri (Department of International Economics, Institutions and Development, and Cognitive Science and Communication research Centre, Università Cattolica del Sacro Cuore); Raul Caruso (Department of Economic Policy and CSEA, Universita Cattolica del Sacro Cuore CESPIC, Catholic University Our Lady of Good Counsel)
    Abstract: This research work provides new evidence about the effect of vulnerability to climate change on the likelihood of communal violence, by sorting out regional-specific path- ways. We focus on Sub-Saharan Africa and South/South-East Asia for the period 1995-2016, these regions being particularly exposed to climate effects and characterized predominantly by rain-fed agriculture and climate-sensitive economic activities. Relying on the ND-GAIN Vulnerability Index as a multidimensional measure for propensity of human societies to be negatively impacted by climate change, we found robust evidence that greater vulnerability is conducive to a higher risk of communal violence in Sub-Saharan Africa. On the other hand, in South/South-East Asia, results suggest that current climate variability, measured as rainfall deviations within the period, exerts a greater effect on communal violence outbreak than overall vulnerability to climate change. In both regions, greater access to productive means is associated to the reduction of conflict risk. Some policy implications were derived that suggest an integrated approach between climate policy-making and social stability efforts, given conditional effects of climate change over the likelihood of communal violence.
    Keywords: communal violence; vulnerability; climate change; conflicts; Africa; Asia
    JEL: D74 O13 Q54 Q56
    Date: 2021–07
  4. By: Abdul A. Erumban; Gaaitzen de Vries
    Abstract: This paper proposes an empirical framework that relates poverty reduction to production growth. We use the GGDC/UNU-WIDER Economic Transformation Database to measure the contribution to growth of productivity improvements within sectors and structural change—the reallocation of workers across sectors—for 42 developing countries from 1990 to 2018. Next, the contributions are used in a regression analysis, which indicates that poverty reduction is significantly related to structural change and productivity growth in manufacturing.
    Keywords: Poverty, Production, Growth, Manufacturing, Structural change, Developing countries
    Date: 2021
  5. By: Bleynat, Ingrid; Challú, Amílcar E.; Segal, Paul
    Abstract: Historical wage and income data provide both normative measures of living standards, and indicators of patterns of economic development. This study shows that, given limited historical data, median incomes are most appropriate for measuring welfare and inequality, while urban unskilled wages can be used to test dualist models of development. We present new estimates of these series for Mexico from 1800 to 2015 and find that both have historically failed to keep up with aggregate growth: GDP per worker is now over eight times higher than in the nineteenth century, while unskilled urban real wages are only 2.2 times higher, and national median incomes only 2.0 times higher. From the perspective of inequality and social welfare, our findings confirm that there is no automatic positive relationship between economic growth and rising living standards for the majority. From the perspective of development, we argue that these findings are explained by a dual economy model incorporating Lewis's assumption of a reserve army of labour, and we explain why the decline in inequality predicted by Kuznets has not occurred.
    JEL: N36
    Date: 2021–08–01
  6. By: Jean-Marie Baland (Center for Research in the Economics of Development, University of Namur); Guilhem Cassan; Benoit Decerf
    Abstract: Poverty and mortality are arguably the two major sources of well-being losses. Most mainstream measures of human development capturing these two dimensions aggregate them in an ad-hoc and controversial way. In this paper, we propose a new indicator aggregating the poverty and the mortality observed in a given period, which we call the poverty-adjusted life-expectancy (PALE). This indicator is based on a single normative parameter that transparently captures the trade-off between well-being losses from being poor or from being dead. We first show that PALE follows naturally from the expected life-cycle utility approach a la Harsanyi (1953). Empirically, we then proceed to between countries or across time comparisons and focus on those situations in which poverty and mortality provide conflicting evaluations. Once we assume that being poor is (at least weakly) preferable to being dead, we show that about a third of these conflicting comparisons can be unambiguously ranked by PALE. Finally, we show that our index naturally defines a new and simple index of multidimensional poverty, the expected deprivation index, which aggregates poverty and premature mortality in a consistent way.
    Date: 2021–10
  7. By: Gauri Kartini Shastry (Wellesley College); Daniel L Tortorice (College of the Holy Cross)
    Abstract: Gavi, the Vaccine Alliance has provided over US$13 billion in funding for vaccination expansion in low-income countries since its founding in 1999. We exploit the differential timing in Gavi support across countries and vaccines to estimate the program’s effects. We find that, on average, Gavi’s support of a vaccine increased coverage rates by 3 percentage points and reduced child mortality from related causes by between 0.5 and 2 children per 1,000 live births. We estimate these improvements saved between 825,000 and 3.3 million lives at a cost ranging from US $3,940 to US $15,757 per life saved. Given the relatively low cost of Gavi’s programs, we argue that Gavi represents a particularly effective form of foreign aid. As Gavi’s programs are tightly linked to desirable development outcomes and can be rigorously evaluated, our results provide support for the broader notion that careful structuring of foreign aid programs can be substantially beneficial for low-income countries.
    Keywords: Foreign Aid; Health, Development; Vaccination
    JEL: F35 I15 O1
    Date: 2021–02
  8. By: David Adeabah (Legon, Ghana); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Over the past decade, a growing number of studies have examined the role of agricultural export in economic growth in Africa. The literature, however, provides conflicting results about the agricultural export-led growth hypothesis. In this study, we aim to examine the impact of agricultural export on economic growth by performing a meta-analysis. Our meta-analysis finds significant presence of negative publication bias in the literature. Using mixed-effect multilevel meta-regression, we find that after correction for publication bias, the average agricultural export elasticity to economic growth is 0.763 for the poor in Africa. Interestingly, agricultural export is growth for the rich in Africa, although the elasticity of GDP is 0.043. These results are consistent with the agricultural export-led growth hypothesis. The implication is that export promotion should be targeted at agricultural output in low-income and lower middle-income countries whereas upper middle-income countries in Africa may focus on non-agricultural export.
    Keywords: Africa; export-led growth; agricultural export; meta-analysis
    JEL: C10 C40 I30 N50 O55
    Date: 2021–11
  9. By: Herrera, Catalina (Northeastern University); Sahn, David E. (Cornell University)
    Abstract: BACKGROUND: Internal migration, mostly composed of young adults and the poor, constitutes the largest flow of people in developing countries. Few studies document the patterns and determinants of internal youth migration in sub-Saharan Africa. OBJECTIVES: This paper analyzes the socioeconomic determinants of the decisions among young adults to internally migrate in Senegal. We focus on whether their decisions to migrate are influenced by individual characteristics, as well as the circumstances in the households and communities where young adults grew up, and whether these factors are differentiated by gender. METHODS: Using a unique migration household survey in Senegal, we estimate multinomial logit models to analyze the role of childhood socioeconomic determinants in later youth migration decisions to rural and urban areas. RESULTS: We find that young people undertake mostly rural-to-rural and urban-to-urban migrations, and over half of them are temporary migrants. We also find that the determinants are heterogeneous by gender and destination. The higher the fathers' education, the more (less) likely are their daughters to move to urban (rural) areas. Young individuals who spend their childhood in betteroff households are more likely to move to urban areas. The presence of younger siblings during childhood increases the propensity of moving to rural areas. Access to primary schools from the childhood residence decreases the likelihood of migrating to urban areas for both men and women. CONTRIBUTION: We contribute to the sparse literature on internal youth migration in developing countries by highlighting the relevance of the family- and community-level characteristics during childhood in predicting later migration in life.
    Keywords: internal migration, youth, Senegal
    JEL: O15 R23 J13 N37
    Date: 2020–02
  10. By: Elizabeth Asiedu; Théophile Azomahou; Neepa Gaekwad; Mahamady Ouedraogo (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: According to the World Bank Enterprises Survey data (WBES), electricity is one of the top constraints to business operations in developing countries. Data from 108 developing countries between 2006 and 2017 show that about 13.6 percent of firms report electricity as the top constraint they face in their activities. This makes electricity the second most important constraint, the first being access to finance (15.2% of firms surveyed). Particularly, in Sub-Saharan Africa (24.53%) and South Asia (23.54%), access to electricity is the first constraint to business development, ahead of political instability and access to finance.
    Abstract: Selon les données de la Banque Mondiale (WBES), les entreprises des pays en développement citent l'électricité comme l'une des principales contraintes qui entravent leurs activités. Les données de 108 pays en développement entre 2006 et 2017 montrent qu'environ 13,6 % des entreprises déclarent l'électricité comme étant le principal obstacle auquel elles sont confrontées dans leurs activités. Cela fait de l'électricité la deuxième contrainte la plus importante, la première étant l'accès au financement (15,2% des entreprises interrogées). En Afrique subsaharienne (24,53%) et en Asie du Sud (23,54%, l'accès à l'électricité est cité comme la première entrave au développement des activités des entreprises, devant l'instabilité politique et l'accès au financement.
    Keywords: Developing countries,Electricity,Contraintes,Pays en dévelopement
    Date: 2021–12–01
  11. By: Efobi, Uchenna; Adejumo, Oluwabunmi O.
    Abstract: Studies have noted the possibility of tax treaties constraining the tax policy autonomy of developing countries, while their impact on enterprise development within host economies remains an empirical issue. This study examines the effects and heterogeneous differences in estimated effects of tax treaties on small businesses in developing countries that agree to these agreements. The study uses the ICTD tax treaties dataset and the World Bank Enterprise Survey data to set up a quasi-experiment framework for selected African Countries. The framework compares countries’ outcomes for small businesses that ratify and enforce a tax treaty and those without a ratified tax treaty for the years pre-2005–2010 and post-2011–2019). We find that tax treaties signed and enforced by developing countries in Africa have a consistent, negative relationship with small business outcomes. These results are driven by the enterprise’s size and internationalisation status but not by the subsidiary status of the sampled small businesses. The findings have implications for policy targeted towards industrial development alongside tax treaty negotiations.
    Keywords: Governance,
    Date: 2021
  12. By: Takahiro Akita (IUJ Research Institutey, International University of University); Dorji Lethro (National Statistics Bureau, Royal Government of Bhutan)
    Abstract: This study examines whether Bhutan’s rural economic growth was pro-poor from 2007-2017 by using expenditure data from the Bhutan Living Standard Surveys. It also conducts an IV probit analysis to explore the determinants of poverty. Even in rural areas, growth is necessary for the reduction of poverty. Besides relying on trickle-down effects from hydropower projects and tourism, promotion of agriculture-based small scale industries is essential for the acceleration of rural economic growth, where further development of basic industrial infrastructure and socioeconomic facilities is imperative. The country also needs to further promote and strengthen basic education in rural areas since education is found to have played an important role in reducing poverty. Many rural households are vulnerable to poverty. To prevent vulnerable households from falling into poverty, more effective social safety net programs may be necessary based on regional differences in factors affecting living conditions.
    Keywords: pro-poor growth, rural economic growth, poverty incidence. expenditure inequality, education, Bhutan
    JEL: I32 O15 O18
    Date: 2021–12
  13. By: Sayour, Nagham (Zayed University); Schröder, Marcel (Asian Development Bank)
    Abstract: This paper explores the job creation impacts of the large foreign direct investment (FDI) inflows to Mongolia’s non-resource sector following the signing of the investment agreement for the Oyu Tolgoi mine in 2009. Using FDI project and national employment data over 2009–2013, we employ a triple difference methodology on the sector–province (aimag)-year level. The results suggest that each FDI job and every $1 million FDI inflow displace 5.5 and 20 local jobs, respectively. Several factors may explain this result: the majority of FDI was targeted at sectors such as transportation and retail where efficiency gains led to job losses; the low skill-intensity of FDI jobs in those sectors; the low labor supply elasticity in Ulaanbaatar where most of the FDI projects are concentrated; and the limited extent of localized supply chains.
    Keywords: resource boom; foreign direct investment; local job multiplier; Mongolia
    JEL: F21 J21 O11 Q32 Q33
    Date: 2021–12–15
  14. By: Mr. Giovanni Ganelli; Anh Thi Ngoc Nguyen; Ms. Era Dabla-Norris
    Abstract: Using data from the Vietnam Labor Force Survey, this paper takes a granular look at the most salient drivers of labor informality in Vietnam by examining: (i) the nature of labor informality and transitions from formal to informal employment status and the role of worker characteristics; (ii) the empirical likelihood of being in informal employment and the policy determinants of informality using within-in country variation in the business climate and governance; and (iii) whether different policy reforms have a differential impact on workers. Our analysis sheds light on how individual characteristics and policy impediments contribute to high levels of informality and points to the need for a comprehensive agenda to tackle informality.
    Keywords: informality;Vietnam;Labor Force Survey;labor market segmentation;structural reforms;economic governance;PCI.;WP;wage worker;wage premium;FDI firm;wage employment;earnings gap;work experience
    Date: 2020–12–11
  15. By: Mst Asma Khatun (School of Economics and Management, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology)
    Abstract: Food intake inequality at individual level is rarely analyzed in intrahousehold settings. We examine dietary diversity scores of household members with a focus on their family roles (fathers, mothers, sons, daughters and grandparents) and age groups (children, adults and elderly). Whereas theory suggests that members in a household should have equal dietary diversity by receiving a certain share of available foods, this research hypothesizes that they do not do so by their roles and/or age groups. We conduct questionnaire surveys, collecting sociodemographic information and dietary data using a 24-hour recall method of 3248 subjects in 811 households from one urban and two rural areas in Bangladesh. The statistical analysis demonstrates three findings. First, poor and rural people have lower dietary diversity than non-poor and urban people, respectively. Second, grandparents (children) have lower dietary diversity than do fathers (adults), confirming an existence of intrahousehold food intake inequality by the roles and/or age groups, irrespective of poverty level and areas of residence. Third, father and mother educations are crucial determinants to uniformly raise the standard of dietary diversity for their household, however, they do not resolve the inequality. Overall, it is suggested that awareness programs of dietary diversity shall be necessary with a target group of fathers and mothers for the betterment of intrahousehold inequality and health at household level, contributing to SDGs.
    Keywords: Dietary diversity, Family role, Age, Intrahousehold inequality, Bangladesh
    Date: 2021–12
  16. By: Steven F. Koch (Department of Economics, University of Pretoria, Private Bag X20, Hatfield, South Africa)
    Abstract: This study estimates food budget share equations to calculate household equivalence scales that address both base-independence and potential endogeneity, even though an instrument that satisfies the usual exclusion restriction may not be available. The application incorporates semi-parametric methods, control functions and heteroscedasticity instrumentation. The application is founded on the most recent income and expenditure data that is available for South Africa. We find that endogeneity matters, and that failing to account for it leads to overstated equivalence scales in nearly every circumstance. When we fit our calculated scales to a typical $(A+\kappaK)^\psi$ equivalence structure via non-linear least squares, we find values of $\kappa$ near unity and values of $\psi$ mostly below 0.5. Thus, our analysis suggests that a square-root scale is more appropriate than other scales that have been used to examine poverty and inequality in South Africa.
    Date: 2021–12
  17. By: Giacomo Battiston (Free University of Bozen-Bolzano); Matteo Bizzarri (University of Naples Federico II and CSEF.); Riccardo Franceschin (Sabanci University)
    Abstract: Resource wealth induces predation incentives but also conflict-deterring third-party involvement. This makes the relation between resource value and conflict probability a priori unclear. This paper studies such relation with a flexible theoretical framework involving a resource holder, a predator, and a powerful third party. First, we show that under general assumptions the theoretical relation between conflict probability is hump-shaped as a function of resource value. Second, we theoretically establish that resource value increases the third party’s incentive to side with the resource-rich defendant in case of intervention, reinforcing its stabilizing role. Third, exploiting widely-used measures of resource value and geologic predictors of oil presence, we provide evidence for our theoretical results. Using data on military bases and arms’ trade, we show suggestive evidence such non-monotonicity is driven by areas exposed to US influence.
    Keywords: conflict, resource curse, third party, oil, intervention.
    JEL: D74 Q38 P48
    Date: 2021–12–03

This nep-dev issue is ©2021 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.