nep-dev New Economics Papers
on Development
Issue of 2022‒01‒17
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The effect of tropical cyclones on economic activities: micro level evidence from Mexico for secondary and tertiary activities By Miriam Juárez-Torres; Jonathan Puigvert
  2. Development Finance and Distributive Politics: Comparing Chinese and World Bank Finance in sub-Saharan Africa By Tang, Keyi
  3. Women Legislators and Economic Performance By Baskaran, Thushyanthan; Bhalotra, Sonia; Min, Brian; Uppal, Yogesh
  4. International Development Lending and Global Value Chains in Africa By Amendolagine, Vito
  5. The road to safety- Examining the nexus between road infrastructure and crime in rural India By Ritika Jain; Shreya Biswas
  6. Sterilizations and immunization in India: The Emergency experience (1975-1977) By Charlotte Pelras; Andrea Renk
  7. The gender productivity gap: Evidence from the Indian informal sector By Ira N. Gang; Rajesh Raj Natarajan; Kunal Sen; Myeong-Su Yun
  8. Addressing Oil Spills and Agricultural Productivity. Evidence of Pollution in Nigeria. By Beatriz Manotas-Hidalgo
  9. Spatial Inequality, Civil Conflict and Cells: A Dynamic Spatial Probit Approach By Vicente Rios; Beatriz Manotas-Hidalgo; Lisa Gianmoena
  10. Extreme weather events and high Colombian food prices: A non-stationary extreme value approach By Luis Fernando Melo-Velandia; Camilo Andrés Orozco-Vanegas; Daniel Parra-Amado
  11. Short-Term Impacts of Targeted Cash Grants and Business Development Services: Experimental Evidence from Entrepreneurs in Burkina Faso By Grimm, Michael; Soubeiga, Sidiki; Weber, Michael
  12. The Macroeconomic Impact of Recent Political Conflicts in Africa: Generalized Synthetic Counterfactual Evidence By Samba Diop; Simplice A. Asongu; Vanessa S. Tchamyou

  1. By: Miriam Juárez-Torres; Jonathan Puigvert
    Abstract: This paper explores the effects of tropical cyclones on the economic activity of establishments in the manufacturing and service sectors in Mexico. The analysis relies on panel data that combines establishment-level economic activity with municipal-level exposure to tropical cyclones on a monthly basis to estimate an augmented distributed lag model. Results show that, after a tropical cyclone, the average manufacturing establishment experiences a short-term and small negative effect on production growth. For establishments in the service sector, the effect is small and negative on revenue growth, while positive, higher in magnitude, and more persistent on growth of operative expenditures. The disaggregated data allows for the analysis of the heterogeneity of the effects between manufacturing and services sectors.
    JEL: Q54 Q51 L60 O12 O14
    Date: 2021–12
  2. By: Tang, Keyi
    Abstract: When development finance becomes available to weak states, which parts of the state will receive the windfall gains? Development finance does not always reach the people who need it the most, both within and across countries. In this research, Keyi Tang examines how donors' preferences and recipient countries' regime types affect the subnational distribution of development finance. By combining a large-N analysis of Chinese and World Bank's loans and grants to 48 African countries between 2000-2012 and small-N case studies of a hybrid regime, Zambia, and an autocratic regime, Ethiopia, Keyi finds that domestic politics play a bigger role than donors' conditionality in development finance allocation. The more democratic a regime is, the more likely co-ethnic regions of the incumbent leader are to receive finance from both China and the World Bank. Democracy may not always help prevent clientelism but may actually facilitate it under weak institutions.
    Date: 2021
  3. By: Baskaran, Thushyanthan (University of Siegen); Bhalotra, Sonia (University of Warwick); Min, Brian (University of Michigan, Ann Arbor); Uppal, Yogesh (Youngstown State University)
    Abstract: There has been a phenomenal global increase in the proportion of women in politics in the last two decades, but there is no evidence of how this inuences economic performance. We investigate this using data on competitive elections to India's state assemblies, leveraging close elections to isolate causal effects. We find significantly higher growth in economic activity in constituencies that elect women and no evidence of negative spillovers to neighbouring male-led constituencies, consistent with net growth. Probing mechanisms, we find evidence consistent with women legislators being more efficacious, less corrupt and less vulnerable to political opportunism.
    Keywords: Political representation ; identity ; India ; gender ; women legislators ; economic growth ; luminosity ; corruption ; roads ; close elections ; electoral incentives JEL Classification: D72 ; D78 ; H44 ; H73
    Date: 2021
  4. By: Amendolagine, Vito
    Abstract: As the world becomes more and more integrated, participating in global production fragmentation by connecting to global value chains (GVCs) can provide a "golden" opportunity for developing countries to access international markets and boost economies. Vito Amendolagine analyses the extent to which international development lending can support African countries in trading intermediate goods with foreign partners with the goal of further specializing in high value-added activities within cross-national production networks. Based on his research, it appears that Chinese lending increases the involvement of borrowing countries in the international trade of intermediate goods, while World Bank loans contribute to move African countries toward higher valued added activities along international production chains.
    Date: 2021
  5. By: Ritika Jain; Shreya Biswas
    Abstract: This study examines the relationship between road infrastructure and crime rate in rural India using a nationally representative survey. On the one hand, building roads in villages may increase connectivity, boost employment, and lead to better living standards, reducing criminal activities. On the other hand, if the benefits of roads are non-uniformly distributed among villagers, it may lead to higher inequality and possibly higher crime. We empirically test the relationship using the two waves of the Indian Human Development Survey. We use an instrumental variable estimation strategy and observe that building roads in rural parts of India has reduced crime. The findings are robust to relaxing the strict instrument exogeneity condition and using alternate measures. On exploring the pathways, we find that improved street lighting, better public bus services and higher employment are a few of the direct potential channels through which road infrastructure impedes crime. We also find a negative association between villages with roads and various types of inequality measures confirming the broad economic benefits of roads. Our study also highlights that the negative impact of roads on crime is more pronounced in states with weaker institutions and higher income inequality.
    Date: 2021–12
  6. By: Charlotte Pelras; Andrea Renk (Paris School of Economics, University of Namur)
    Abstract: This paper investigates whether the intense sterilization campaign in 1976-77 in India led to a decrease in demand for health services, with the idea that this coercive campaign could have generated distrust. We use administrative data to discuss and build a measure of coercion intensity. Outcome-wise, we focus on immunization and institutional delivery using survey data collected only a few years after the event. We take advantage of retrospective data to build a panel, to compare outcomes across siblings or children within the same village based on children’s birth date. Results show a strong decrease in use of formal medicine, with a decline of 17% in the probability to receive any vaccine post-Emergency when coercion increases by one standard deviation. Heterogeneity analysis highlights distance to health infrastructure and parents’ literacy matter.
    Date: 2021–12
  7. By: Ira N. Gang; Rajesh Raj Natarajan; Kunal Sen; Myeong-Su Yun
    Abstract: We examine the patterns and correlates of the productivity gap between male-owned and female-owned firms for informal enterprises in India. Female-owned firms are on average 45 per cent less productive than male-owned firms, with the clearest productivity gaps observed at the lower end of the productivity distribution. Using decomposition methods, we find that about 73 per cent of the productivity gap can be explained by structural effect, with the remainder being due to differences in observable characteristics as captured by composition effect.
    Keywords: Gender, Productivity gap, India, Decomposition methods, Informal sector
    Date: 2021
  8. By: Beatriz Manotas-Hidalgo (Universidad Publica de Navarra)
    Abstract: This paper examines how the pollution generated by oil operations in Nigeria can affect agricultural total factor productivity. I analyze oil spills, which are the main ecological disaster in Nigeria and lead to major environmental, economic, and social problems. Following a consumer-producer household framework, and applying a difference-and-difference approach, I estimate an agricultural production function. I find that farmers located less than 10 kilometers from oil spills suffer a relative reduction in agricultural output of around 2.73%. I also examine alternative mechanisms and find that oil-spill pollution can explain my results. I detect less owner-occupied land and a drop in labor income in urban areas close to oil spills, which could also be explained by a decrease in the labor productivity component. This study highlights an externality through which the oil industry affects living conditions in rural areas and stresses the importance of clean-up in areas close to oil spills.
    Date: 2021
  9. By: Vicente Rios (Universita degli Studi di Milano); Beatriz Manotas-Hidalgo (Universidad Publica de Navarra); Lisa Gianmoena
    Abstract: This study examines the link between spatial income inequality and civil conflict in Africa. To that end, we extend traditional empirical models of conflict to account for both endogenous and exogenous spatial interaction effects in the process of conflict by means of modern spatial econometric techniques. Using a geographically disaggregated annual high-resolution cell data for a sample of African countries during the period 1998 to 2013, we quantify the effect of spatial inequality on the probability of conflict incidence. Estimates show the existence of a positive and statistically signicant relationship between spatial income inequality and conflict in African regions. This is partly due to the role played by spatial spillovers induced by spatial inequality in neighboring regions. The observed link is robust to the inclusion in the analysis of different explanatory variables that may affect both conflict and spatial inequality such as the level of economic development, the endowment of natural resources, infrastructures, geographical conditions, population density, fractionalization, polarization, socialexclusion, or the share of urban population. The observed positive effect does not depend on the level of data disaggregation, the type of conflict, the spatial inequality metric used in the analysis and the econometric specification employed to capture the nature of spatial spillovers.
    Date: 2021
  10. By: Luis Fernando Melo-Velandia; Camilo Andrés Orozco-Vanegas; Daniel Parra-Amado
    Abstract: Given the importance of climate change and the increase of its severity under extreme weather events, we analyze the main drivers of high food prices in Colombia between 1985 and 2020 focusing on extreme weather shocks like a strong El Ni˜ño. We estimate a non-stationary extreme value model for Colombian food prices. Our findings suggest that perishable foods are more exposed to extreme weather conditions in comparison to processed foods. In fact, an extremely low precipitation level explains only high prices in perishable foods. The risk of high perishable food prices is significantly larger for low rainfall levels (dry seasons) compared to high precipitation levels (rainy seasons). This risk gradually results in higher perishable food prices. It is non linear and is also significantly larger than the risk related to changes in the US dollar-Colombian peso exchange rate and fuel prices. Those covariates also explain high prices for both perishable and processed foods. Finally, we find that the events associated with the strongest El Ni˜ño in 1988 and 2016 are expected to reoccur once every 50 years. **** RESUMEN: Dada la importancia del cambio climático y su impacto sobre la ocurrencia de eventos climáticos extremos, se analizan los principales determinantes que explican altos precios de alimentos en Colombia entre 1985 y 2020 haciendo énfasis sobre los choques extremos climáticos como por ejemplo un fenómeno de El Ni˜ño fuerte. Se estima un modelo no estacionario de valores extremos para los precios de alimentos en Colombia y se encuentra evidencia que sugiere que aquellos bienes perecederos son los más expuestos a las condiciones climáticas en comparación con bienes de alimentos procesados. El riesgo asociado a altos precios de alimentos perecederos es significativamente más elevado para bajos niveles de precipitación (temporadas secas) comparados con altos niveles de precipitación (temporada de lluvias). Este riesgo del clima explica en buena parte los altos precios de perecederos el cual no es lineal. Adicionalmente, el riesgo asociado al factor climático es significativamente más alto a aquellos otros determinantes de altos precios como lo son la tasa de cambio peso-dólar y la dinámica de los precios de combustibles. Estas variables también explican altos precios de los alimentos tanto procesados como perecederos. Finalmente, se encuentra evidencia que sugiere que eventos como El Ni˜ño fuerte observados en 1988 y 2016 fueron los más extremos y las estimaciones sugieren que eventos parecidos tienen una re-ocurrencia de una vez cada 50 a˜ños.
    Keywords: Extreme weather events, Extreme value theory, Food inflation, Return levels, Relative Risk ratio, Eventos climáticos extremos, Teoría de valor extremo (EVT), precios de alimentos, niveles de riesgo, razones de riesgo relativo
    JEL: C32 C50 E31
    Date: 2022–01
  11. By: Grimm, Michael (University of Passau); Soubeiga, Sidiki (University of Passau); Weber, Michael (World Bank)
    Abstract: Most support programs targeted at small firms in low- and middle-income countries fail to generate transformative effects at a large scale due to bad targeting, too little flexibility, and the limited size of the support, among others. This paper assesses the short-term effects of a randomized targeted Government support program to small and medium-size firms that have been selected based on a business plan competition. One group received large cash grants of up to US$8,000, with flexible conditions of use. A second group received grants of an equally important size but earmarked to business development services and thus less flexible and with a required own contribution of 20 percent. A third group serves as a control group. All firms operate in agribusiness or related activities in a semi-urban area. An assessment of the short-term impacts shows that beneficiaries of cash grants engage in better business practices, such as formalization and bookkeeping. They also invest more. Yet, this does not translate into higher profits and employment. There is no effect on investment and business practices among beneficiaries of grants for business development services. Yet, both treatment groups show a higher ability to innovate relative to the control group. The results also show that cash grants cushioned the adverse effects of the COVID-19 pandemic. A further round of data collection will soon allow to assess the longer-term effects of both interventions which may differ from the short-term effects analyzed here as both interventions may need time to unfold their full effects.
    Keywords: firm support programs, cash grants, finance, matching grants, business development services, agribusiness, randomized controlled trial
    JEL: D22 O12 Q13
    Date: 2021–11
  12. By: Samba Diop (Alioune Diop University, Bambey, Senegal); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon)
    Abstract: This paper measures the macroeconomic impact of recent political crisis, protest and uprisings in Africa with the generalized synthetic control method and evaluates the role played by natural resource dependence on the modulation of the impact. We find that political crisis, protests and uprisings have a significant and negative impact on economic growth while the impact is positive on investment and price level. For economic growth, the deviation of the actual series from the counterfactual is negative, instantaneous, persistent and highly significant; indicating non-negligible costs of the shock. Indeed, dependence on natural resources amplifies the negative effect of political crisis, protests and uprisings on GDP. Finally, the more the treated country depends on natural resources, the more it becomes resilient from the investment losses caused by political crisis.
    Keywords: political conflicts; economic growth; Africa
    JEL: F52 K42 O17 O55 P16
    Date: 2021–01

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