nep-dev New Economics Papers
on Development
Issue of 2022‒05‒02
fifteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Medication against Conflict By Andrea Berlanda; Matteo Cervellati; Elena Esposito; Dominic Rohner; Uwe Sunde
  2. Colonial Origins and Fertility: Can the Market Overcome History? By David Canning; Marie Christelle Mabeu; Roland Pongou
  3. The multidimensional impacts of the Conditional Cash Transfer program Juntos in Peru By Morel Berendson, Ricardo; Girón, Liz
  4. Firms and Labor in Times of Violence: Evidence from the Mexican Drug War By Utar, Hale
  5. Insurance and Poverty Reduction: Evidence from Philippine Urban and Rural Households By Pia, Medrano
  6. Who Benefits from Piped Water in the House? Empirical Evidence from a Gendered Analysis in India By Sedai, Ashish Kumar
  7. Working Paper 363 - Growing Green: Enablers and Barriers for Africa By Chuku Chuku; Victor Ajayi
  8. Does India Use Development Finance to Compete With China? A Subnational Analysis By Gerda Asmus; Vera Eichenauer; Andreas Fuchs; Bradley C. Parks
  9. The productive role of social policy By Rodríguez Torres, Omar
  10. (Mis-)information technology: Internet use and perception of democracy in Africa By Joël Cariolle; Yasmine Elkhateeb; Mathilde Maurel
  11. Working Paper 361 - Labour mobility and innovation in Africa By Linguère Mously Mbaye; Assi Okara; Massimiliano Tani
  12. Land rights and the impact of farm input subsidies on poverty convergence By Mwale, Martin Limbikani; Kamninga, Tony Mwenda
  13. Monitoring Poverty in a Data Deprived Environment: The Case of Lebanon By Paul Makdissi; Walid Marrouch; Myra Yazbeck
  14. Maternal Displacements during Pregnancy and the Health of Newborns By Cellini, Stefano; Menezes, Livia; Koppensteiner, Martin Foureaux
  15. How does research and development affect the nexus of climate change and agricultural productivity in Asian and Pacific countries? By Huynh, Cong Minh

  1. By: Andrea Berlanda; Matteo Cervellati; Elena Esposito; Dominic Rohner; Uwe Sunde
    Abstract: The consequences of successful public health interventions for social violence and conflict are largely unknown. This paper closes this gap by evaluating the effect of a major health intervention – the successful expansion of anti-retroviral therapy (ART) to combat the HIV/AIDS pandemic – in Africa. To identify the effect, we combine exogenous variation in the scope for treatment and global variation in drug prices. We find that the ART expansion significantly reduced the number of violent events in African countries and sub-national regions. The effect pertains to social violence and unrest, not civil war. The evidence also shows that the effect is not explained by general improvements in economic prosperity, but related to health improvements, greater approval of government policy, and increased trust in political institutions. Results of a counterfactual simulation reveal the largest potential gains in countries with intermediate HIV prevalence where disease control has been given relatively low priority.
    Keywords: HIV, conflict, social violence, ART expansion, trust, Africa, health intervention, domestic violence
    JEL: C36 D47 I15 O10
    Date: 2022
  2. By: David Canning; Marie Christelle Mabeu; Roland Pongou
    Abstract: Can market incentives overcome the long-term impact of historical institutions? We address this question by focusing on the role of colonial reproductive policies in shaping fertility behavior in Africa. Exploiting the arbitrary division of ancestral ethnic homelands and the resulting discontinuity in institutions across the British-French colonial borders, we find that women in former British areas are more likely to delay sexual debut and marriage, and have fewer children. However, these effects disappear in areas with high market access, where the opportunity cost of childbearing appears to be high irrespective of colonizer identity. This heterogeneous impact of colonial origins is robust across different measures of access to international and domestic markets. Examining causal mechanisms, we collect archival data on colonial reproductive laws and policies to conduct an event-study analysis. We find that the effect of colonial origins on fertility is entirely driven by differences in the timing of colonial population policies and their lasting impact on the use of modern methods of birth control. We find little evidence that the fertility effect of British colonization operates through education or income. While British colonization is linked to higher female education, this occurs mainly in areas with higher market access while the fertility effects do not. Again, while income levels differ, the fertility gap between British and French colonies opened prior to 1980, whereas the income gap only opened after 1990. Our analysis highlights the heterogeneous nature of the colonial origins of comparative fertility behavior, and implies that economic incentives may overcome historical determinism.
    Keywords: Fertility, Colonial Origins, Colonial Reproductive Laws and Policies, Market Access, Historical Determinism, Africa.
    Date: 2022
  3. By: Morel Berendson, Ricardo (UNU-MERIT, Maastricht University); Girón, Liz (World Bank)
    Abstract: Policy decisions are sensitive to the conceptualization of poverty and, in line with the growing demand for multidimensional poverty measurement, we conducted an impact evaluation of Peru's largest social protection intervention - the conditional cash transfer program 'Juntos' - to further understand its effects on multidimensional poverty. We combine a propensity score matching with a difference-in-difference approach to estimate and compare two multidimensional indices created using the Alkire-Foster method. The first replicates the Global Multidimensional Poverty Index (MPI) while the other is a Juntos-tailored MPI. We do not find robust and statistically significant effects of the program in either index. Despite finding steeper reductions among Juntos beneficiaries, particularly in education and health indicators, these changes cannot be statistically attributed to the program. We further conclude that using a multidimensional poverty index can be a highly useful evaluation tool when thoroughly adapted to the theory of change of the intervention under assessment.
    Keywords: conditional cash transfers, multidimensional poverty, Juntos, Peru
    JEL: I32 I38
    Date: 2022–04–04
  4. By: Utar, Hale (Grinnell College)
    Abstract: This paper examines how firms in an emerging economy are affected by violence due to drug trafficking. Employing rich longitudinal plant-level data covering all of Mexico from 2005–2010, and using an instrumental variable strategy that exploits plausibly exogenous spatiotemporal variation in the homicide rate during the outbreak of drug-trade related violence in Mexico, I show that violence has a significant negative impact on plant output, product scope, employment, and capacity utilization. Resilience to violence differs widely across different types of employment within firms and across firms with different characteristics. Employment decline is driven by bluecollar employment only. Dissecting within- and cross-plant heterogeneity points to a local labor supply channel where particularly plants utilizing low-wage, female, blue-collar workers are impacted. Consistent with a blue-collar labor supply shock, the results show a positive impact on average blue-collar wages and a negative impact on average white-collar wages at the firm level. Output elasticity of violence is also shown to be larger among low-wage, female-intensive but also domestically buying and selling plants. These findings show the rise of drug violence has significant distortive effects on domestic industrial development in Mexico and shed light on the characteristics of the most affected firms and the channels through which they are affected.
    Keywords: firms, violence, organized crime, manufacturing, drug war, Mexico, labor, technology, productivity, reallocation, gender
    JEL: L25 L60 O12 O14 O18 O19 R11 O54 F14
    Date: 2022–03
  5. By: Pia, Medrano
    Abstract: The poor are the most vulnerable class to risks and shocks and yet are also the least likely to be insured. In this essay, I explore the relationship between insurance and poverty reduction using a nationally representative household panel data from the Philippines. I find that the main pathway through which insurance coverage diminishes vulnerability to poverty is by aiding already non-poor households from falling into poverty in the face of shocks. In contrast, insurance coverage is insignificant in aiding escape from poverty among already poor households. However, a difference-in-difference (DID) analysis that exploit the occurrence of super-typhoon Reming in 2006 in the Bicol region of the Philippines suggest that insurance coverage enabled poor households to escape from poverty in the face of a natural disaster. Hence, while insurance may not be a magic cure to fundamental roots of poverty, it remains a critical tool in diminishing the exposure to poverty of the most vulnerable sectors of Philippine society.
    Keywords: Insurance, Poverty, Shock
    JEL: I3 I32 R2
    Date: 2022–03–16
  6. By: Sedai, Ashish Kumar (Asian Development Bank Institute)
    Abstract: The disproportionate burden of water collection, maintenance, and service for women in developing economies calls for a juxtaposition of water infrastructure and gender differences at the household level. We use spatiotemporal data from the largest gender disaggregated human development survey in India (2005–2012) and carry out econometric analyses using individual fixed effects, conditionally exogenous village fixed effects, and instrumental variable regressions to study the effect of indoor piped drinking water (IPDW) on employment and earnings by gender, the self-reported health of women, the prevalence of diarrhea, and children’s absence from school. Among others, the results show that a 0.1% increase in village access to IPDW increases the likelihood of women’s overall employment by 0.33 percentage points and women’s wage/salary employment by 0.39 percentage points, comparatively more than for men. Women’s earnings with IPDW increase by 9.9%, their health improves, and children’s health and education outcomes improve. Our study recommends evaluating the social demand curve for a piped water supply and/or the consideration of a piped water supply as a right as part of a broader strategy to reduce gender differences.
    Keywords: piped water; gender; employment; health; education; India
    JEL: J16 J21 Q25 R11
    Date: 2021–06
  7. By: Chuku Chuku (International Monetary Fund); Victor Ajayi (Judge Business School, University of Cambridge, United Kingdom)
    Abstract: Discussions about green growth transition in Africa have mostly been silent on quantifying Africa's progress and assessing countries' "green" versus "brown" growth performance. We construct a measure of Africa's green growth performance using an emissionsadjusted production technology framework that jointly accounts for the production of desirable and undesirable outputs over the period 2000-2019. We also identify the important country-level characteristics that drive green productivity growth. The computed green Malmquist-Luenberger productivity indexes penalize countries for the production of "bad" outputs and credit countries for the reduction in emissions and production of "good" outputs. Our main results indicate that Africa's productivity growth is overstated when undesirable outputs are ignored in the measurement of Africa's growth performance. Second, it is technological progress and not efficiency change-i.e., the catch-up effect-that has been the primary source of Africa's green economy transition, implying a reduction in the gap to the technological frontier for most countries. Our analysis of the drivers of green growth shows that high-income levels, tradeembodied R&D, and domestic R&D are the main enablers of green growth, while high energy intensity is the main barrier to green productivity growth. We also find evidence of nonlinearities between income level and green growth performance, consistent with the environmental Kuznets curve hypothesis. The paper ends with far-reaching policy recommendations for accelerating Africa's green growth transition.
    Keywords: Green TFP growth, greenhouse gas emissions, Malmquist-Luenberger productivity index, trade-embodied R&D JEL classification: Q54, Q52, Q43, D24
    Date: 2022–03–24
  8. By: Gerda Asmus (Heidelberg University - Alfred Weber Institute for Economics); Vera Eichenauer (ETH Zurich, Switzerland); Andreas Fuchs (University of Goettingen, Department of Economics and Centre for Modern East Asian Studies); Bradley C. Parks (AidData, Global Research Institute, William and Mary, Center for Global Development)
    Abstract: China and India increasingly provide aid and credit to developing countries. This paper explores whether India uses these financial instruments to compete for geopolitical and commercial influence with China (and vice versa). To do so, we build a new geocoded dataset of Indian government-financed projects in the Global South between 2007 and 2014 and combine it with data on Chinese government-financed projects. Our regression results for 2,333 provinces within 123 countries demonstrate that India’s Exim Bank is significantly more likely to locate a project in a given jurisdiction if China provided government financing there in the previous year. Since this effect is more pronounced in countries where India is more popular relative to China and where both lenders have a similar export structure, we interpret this as evidence of India competing with China. By contrast, we do not find evidence that China uses official aid or credit to compete with India through co-located projects.
    Keywords: development finance, foreign aid, official development assistance, official credits, South-South Cooperation, China, India, geostrategic competition, geospatial analysis
    JEL: F34 F35 F59 H77 H81 O19 O22 P33 R58
    Date: 2022–01
  9. By: Rodríguez Torres, Omar (UNU-MERIT, Maastricht University)
    Abstract: This paper assesses the productive role of social policy. It analyses the effect that participating in social policy programmes has on business performance of enterprises in Cartagena, Colombia. To investigate these effects, we employ an instrumental variable analysis to account for the potential endogeneity of participation. Exploiting the existence of a partially complied eligibility rule for Participation in the poverty reduction programme we are able to identify the effect on several enterprise indicators. The paper contributes to the literature on entrepreneurship policies in developing countries from the social policy perspective. It sheds light on the effects and potential mechanisms that the participation on social policy schemes has on the entrepreneurial activity of household enterprises. The results show that complier participating entrepreneurs are more credit-oriented and work more hours per day. No statistically significant effect is found on profit measures.
    Keywords: Social policy, poverty reduction, entrepreneurship, public policy, enterprise policy
    JEL: I31 I32 L26 J48 L53 O15 O35
    Date: 2022–03–18
  10. By: Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Yasmine Elkhateeb (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Cairo University); Mathilde Maurel (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: This paper investigates the impact of internet use as a means of accessing news on African citizens' demand for and perception of the supply of democracy. This question is addressed using cross-sectional data from the last three rounds of the Afrobarometer survey for a sample of 25 African countries between 2011 and 2018. Using an instrumental variable approach to control for the possible endogeneity bias between internet use and citizens' perceptions, we found that using the internet to get news has a negative and significant effect on the demand for and on the perceived supply of democracy. The negative effect is channeled through two main factors. The first factor is the confidence in governments and governmental institutions, which is undermined by the use of the internet. In particular, we find that this internet-induced lower confidence translates into a higher probability of engaging in street protests instead of increased political participation. The second driving factor is the (mis-)information channel. On the one hand, we show that internet users' perception of the supply of democracy negatively diverges from experts' ratings. On the other hand, we document further that internet use increases the likelihood of incoherence in the respondent's stance about her demand for democracy. Finally, we show that the negative effect we found is mitigated when the internet is complemented by traditional media sources, especially the radio, to get informed. The findings of this study suggest that internet use is not neutral and tends to undermine citizens' preferences for democracy and alter perceptions about the functioning of political institutions.
    Keywords: Internet news,democracy,Africa
    Date: 2022–03
  11. By: Linguère Mously Mbaye (African Development Bank); Assi Okara (African Development Bank); Massimiliano Tani (University of New South Wales)
    Abstract: We develop a theoretical model to investigate whether short-term mobility differentially affects innovation in product or process and carry out an empirical analysis with a focus on Africa using firm-level data from the World Bank Enterprise Survey, as well as complementary country level information collected by the World Bank, the World Trade Organisation, and the United Nations. We find that labor mobility positively affects innovation: on average, a 10% increase in the flow of international visits per 10,000 inhabitants is associated with a 0.4 increase in the probability to innovate in products/services or process, supporting the use of labor mobility as an effective mechanism to diffuse productive knowledge and foster innovation. The probability of innovation as a result of short-term mobility is 0.4 higher in Africa overall ± especially in East Africa ± vis-à -vis the rest of the world, and strongest in the case of innovation in products and services rather than process, suggesting limited capability to produce entirely within the continent. The results are robust to a variety of approaches controlling for endogeneity, which include a control function approach and the use of an instrumental variable based on a gravity model. Focusing only on arrivals for business and professional purposes, our findings show stronger evidence that African firms are more likely to innovate as a result of short-term mobility compared to the rest of the world. Making Africa a more attractive place to visit by promoting socio-political stability, improving the business environment, developing networks in key areas such as education, and easing administrative travel requirements will be key to fostering innovation in the continent.
    Keywords: Innovation, labor mobility, Africa JEL classification: F20, F22, J24, J61, O14, O55
    Date: 2022–03–24
  12. By: Mwale, Martin Limbikani; Kamninga, Tony Mwenda
    Abstract: Notwithstanding the global significant progress in reducing poverty over the last two decades, still many people live in poverty. Consequently, social protection remains key to welfare sustainability. In this paper, we used longitudinal data from Malawi to examine the impacts of farm input subsidies on poverty convergence. Convergence is coined here as the reduction in persistence of poverty over time. We specifically estimated the response of poverty convergence in a current period, to farm input subsidies that were provided in a prior period, to understand if the programs build sustainable welfare resilience among poor households. We analyse the convergence in two opposing land rights regimes: matrilocal settlements where only women hold rights to land, and patrilocal settlements where only men hold rights to land. Matrilocal and patrilocal settlements offer varying incentives to household heads, who are often men, of investing in familial land. We find that farm input subsidies lead to poverty convergence, only in settlements where men hold rights to land and receive the subsidies on behalf of their households. Poverty convergence is non-responsive to the subsidies in settlements where men receive the subsidies on behalf of their households, while women together with their extended families, hold rights to the land. We further find that the impact of farm input subsidies on poverty convergence is significant in a year when Malawi faced drought, suggesting that the subsidies built sustainable resilience, against an unanticipated climatic shock, in poor households. The paper calls for anti-poverty policies to target poor people while paying attention to their landholding traditions shared prosperity, is to be achieved.
    Keywords: Poverty Convergence; Subsidies; Land rights; Resilience; Shared Prosperity; Malawi
    JEL: D1 D6 H2 H5 O1 O2 Q1
    Date: 2022–03–14
  13. By: Paul Makdissi (University of Ottowa); Walid Marrouch (Lebanese American University); Myra Yazbeck (University of Ottawa)
    Abstract: This paper is motivated by the dearth of statistical capacity in the Middle East North Africa region and the unprecedented economic collapse in Lebanon. It proposes and illustrates a data augmentation approach to conduct poverty analysis in the absence of traditional sources of information on income distribution. Our approach shows that it is possible to exploit alternative data sources to conduct the much-needed poverty analysis. Building on available data augmentation techniques, we first recover the entire income distribution from the available interval data. Then we account for nonresponse and estimate the bounds of the set of admissible cumulative distributions of income. Finally, we analyze poverty dynamics using first-order dominance tests on the bounds of admissible cumulative distributions set. To illustrate the importance of the proposed approach, we apply this methodology to Lebanese data, provide a picture of poverty dynamics, and provide insights into the politico-economic dynamics preceding the economic collapse.
    Keywords: poverty dynamics, stochastic dominance, data deprivation
    JEL: I31 I32 O15
    Date: 2022–04
  14. By: Cellini, Stefano (University of Surrey); Menezes, Livia (University of Birmingham); Koppensteiner, Martin Foureaux (University of Surrey)
    Abstract: In this paper, we estimate the effect of maternal displacements during pregnancy on birth outcomes by leveraging population-level administrative data from Brazil on formal employment linked to birth records. We find that involuntary job separation of pregnant single mothers leads to a decrease in birth weight (BW) by around 28 grams (-1% ca.) and an increase in the incidence of low BW by 10.5%. In contrast, we find a significant positive effect on the mean BW and a decrease in the incidence of low BW for mothers in a marriage or stable union. We document more pronounced negative effects for single mothers with lower earnings and no effect for mothers in the highest income quartile, suggesting a mitigating role of self-insurance from savings. Exploiting variation from unemployment benefits eligibility, we also provide evidence on the mitigating role of formal unemployment insurance using a Regression Discontinuity design exploiting the cutoff from the unemployment insurance eligibility rule.
    Keywords: dismissals, birth outcomes, informal insurance, unemployment insurance
    JEL: D14 I10 J65
    Date: 2022–03
  15. By: Huynh, Cong Minh
    Abstract: This study empirically examines the impact of climate change and agricultural research and development (R&D) as well as their interaction on agricultural productivity in 12 selected Asian and Pacific countries over the period of 1990 – 2018. Results show that both proxies of climate change – temperature and precipitation – have negative impacts on agricultural productivity. Notably, agricultural R&D investments not only increase agricultural productivity but also mitigate the detrimental impact of climate change proxied by temperature on agricultural productivity. Interestingly, climate change proxied by precipitation initially reduces agricultural productivity until a threshold of agricultural R&D beyond which precipitation increases agricultural productivity. The findings imply useful policies to boost agricultural productivity by using R&D in the context of rising climate change in the vulnerable continent.
    Keywords: Agricultural productivity; Asia and Pacific; Climate change; R&D; SGMM
    JEL: D24 O13 O33 Q16 Q54
    Date: 2022–04–03

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