nep-dev New Economics Papers
on Development
Issue of 2022‒08‒29
nine papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Forced migration and food crises By Federico Carril-Caccia; Jordi Paniagua; Marta Suárez-Varela
  2. Confined to Stay: Natural Disasters and Indonesia's Migration Ban By Andrea Cinque; Lennart Reiners
  3. Effects of internal migration on labour market behaviour of families left-behind in Vietnam By David Granada Donato
  4. Labor informality and financial inclusion transitions: Evidence from Peru By Gasmi, Farid; Aurazo, Jose
  5. "Efficacy of Public Financial Management in Reducing Crime against Children: Empirical Evidence from Subnational Governments in India" By Jitesh Yadav; Lekha Chakraborty
  6. The Finance–Growth Nexus inAsia : A Meta-Analytic Approach By Anwar, Amar; Iwasaki, Ichiro
  7. Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment By Ms. Filiz D Unsal; John A Spray; Cedric Okou
  8. Help Me Help You? Populism and Distributive Politics in Ecuador By Adrian Nicholas Gachet
  9. Inflation Targeting and Private Domestic Investment in Developing Countries By Bao-We-Wal BAMBE

  1. By: Federico Carril-Caccia (University of Granada); Jordi Paniagua (University of Valencia and Kellogg Institute, University of Notre Dame); Marta Suárez-Varela (Banco de España)
    Abstract: There is growing concern about the increase in food insecurity across the world, but little is known of its economic implications. This paper quantifies the effect of food crises on forced international migration (FIM) flows using a structural gravity model. To this end, we use a database that measures the severity, intensity and causes of food crises. The results suggest that even less severe food crises tend to increase FIM flows. More severe food crises tend to skew FIM flows towards developing countries. The results obtained appear to indicate that food crises tighten liquidity constraints on migration and that these constraints worsen as the food crisis intensifies.
    Keywords: forced migration, food security, gravity equation
    JEL: F22 O15 Q18
    Date: 2022–07
  2. By: Andrea Cinque; Lennart Reiners
    Abstract: This paper investigates the effects of international migration restrictions on communities’ capacity to absorb income shocks after natural catastrophes. We adopt the implementation of an emigration ban on female Indonesians as a natural experiment. After an array of violent assaults against female servants in Saudi Arabia, the Indonesian government issued a moratorium in 2011, preventing millions of female workers to migrate there as domestic workers. Exploiting the exogenous timing of the ban and that of natural disasters allows us to estimate the causal effect of the absence of international migration as an adaptive strategy. Relying on a panel of the universe of Indonesian villages, we use a triple difference strategy to compare poverty levels in the aftermath of natural disasters for villages whose main destination is Saudi Arabia against others, before and after the policy shock. We find that in villages with strong ex-ante propensity to migrate to Saudi Arabia, poverty increases by 13% in face of natural disasters after the ban, further aggravating the already severe consequences induced by those events.
    Keywords: migration, natural disasters, Indonesia, migration ban
    JEL: F22 J61 Q54
    Date: 2022
  3. By: David Granada Donato
    Abstract: This document explores the implications of a migratory shock (in the form of household member(s) leaving) on the labour market behaviour of individuals left-behind in Vietnam. In addition, various coping mechanisms exhibited by each age group and their implications regarding sectoral labour allocation are further explored. Using panel data of 2,200 households in six waves and a DiD specification, the results suggest an increase in the likelihood of working for the elderly in agriculture that is most likely associated with higher labour invested in livestock activities. The results are robust to different specifications. Moreover, this coping mechanism of increased work is exhibited by those families that do not receive remittances and seems to last (even increase) for up to three periods after the migratory shock occurs. Interestingly, there is also evidence of diminishing returns on working probability when the share of migrants in the household increase.
    Keywords: Migration, Left-Behind, Labour Market, Agriculture
    JEL: J61 O15 P25 R23
    Date: 2022–01
  4. By: Gasmi, Farid; Aurazo, Jose
    Abstract: Considered as a cornerstone of development, financial inclusion has become a universal goal, in particular for developing countries that happen to be characterized by a high degree of labor informality. Our aim in this paper is twofold. First, we study how labor informality affects financial inclusion in a static framework. Second, we argue that financial inclusion must be treated as a dynamic process and investigate the effect of movements between formal and informal jobs on the probabilities of entry to and exit from the financial system. We find evidence that financial inclusion is an auto-regressive process and that labor informality reduces the probability of entry to the financial system by 8% whereas it increases the probability of exit from it by 9.3%. As to transitions in the labor market, we find that, relative to workers who get stuck in informal jobs, for those who have and stay with formal jobs, the probability that they enter the financial system is higher by 9% and the probability that they exit from it is lower by 12%. As to the workers who move into labor formality, we find that they are more likely to enter the financial system by 9.7% and less likely to exit from it by 7.1%. Our results add to the many well documented spillover effects of labor formality in developing countries to encourage policies that promote it.
    Keywords: Financial inclusion; labor informality; transition probabilities; dynamic randomeffect panel probit
    JEL: C23 D14 E26 I31 O17
    Date: 2022–07–28
  5. By: Jitesh Yadav; Lekha Chakraborty
    Abstract: Public financial management (PFM) has a significant role in linking resources to results by financing human development outcomes. When economic stimulus packages are short run in nature, thematic PFM, such as child budgeting, has a crucial role in reducing crime against children. Using fixed effects models, we explore the determinants of reduced crime against children. The PFM-related variables are found to have greater impact than economic growth per se in tackling crime against children. Capital expenditure in the social sector is found to be inversely related to crimes against children, though mere allocation in social sector budgets is not found to be effective in reducing crime rates. Specific PFM tools, like child budgeting, need to be analyzed for their role in child protection services. In India, child budgeting has been introduced in states where the rates of crime against children are also high. To understand the efficacy of child budgeting in reducing crime rates, the year of inception (year in which the child budgeting was introduced in the state) of children budgeting in a state is incorporated in the panel models. The coefficients reveal that years of inception and crime against children are inversely related, reinforcing the effectiveness of PFM tools such as child budgeting in reducing crimes. The existence of a positive link between social expenditure and the incidence of crime is at first counterintuitive, but a closer examination reveals a nonlinear relationship between crime incidence and social spending, which is revealed from the statistically significant negative squared term.
    Keywords: Public Financial Management; Child Budgeting; Social Spending; Child Protection
    JEL: C33 H00 H5 J13
    Date: 2022–08
  6. By: Anwar, Amar; Iwasaki, Ichiro
    Abstract: This paper features a meta-analysis of the effects of financial development and liberalization on macroeconomic growth in Asia. A meta-synthesis of 748 estimates extracted from 75 previous works indicates that the growth-enhancing effect of finance reaches an economically meaningful scale in the region. Synthesis results also reveal that the finance–growth nexus in South Asia is stronger than that in East Asia. Publication selection bias is examined using both linear and nonlinear techniques, and our results show that there is a possibility of publication bias in the literature. After applying advanced and up-to-date metaanalysis methods, we find that the collected estimates contain significant underlying empirical evidence of the impact of finance on economic growth for both Asia and its subregions.
    Keywords: financial development, economic growth, meta-analysis, publication selection bias, Asia
    JEL: E44 G10 O11 O16 D53
    Date: 2022–08
  7. By: Ms. Filiz D Unsal; John A Spray; Cedric Okou
    Abstract: This paper analyzes the domestic and external drivers of local staple food prices in Sub-Saharan Africa. Using data on domestic market prices of the five most consumed staple foods from 15 countries, this paper finds that external factors drive food price inflation, but domestic factors can mitigate these vulnerabilities. On the external side, our estimations show that Sub-Saharan African countries are highly vulnerable to global food prices, with the pass-through from global to local food prices estimated close to unity for highly imported staples. On the domestic side, staple food price inflation is lower in countries with greater local production and among products with lower consumption shares. Additionally, adverse shocks such as natural disasters and wars bring 1.8 and 4 percent staple food price surges respectively beyond generalized price increases. Economic policy can lower food price inflation, as the strength of monetary policy and fiscal frameworks, the overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.
    Keywords: Food prices; inflation; food insecurity; disasters; wars; monetary policy framework
    Date: 2022–07–08
  8. By: Adrian Nicholas Gachet
    Abstract: Populist regimes manage to dismantle checks and balances on the executive with the help of popular support. What does a distributive politics model predicts under a populist regime? In this paper I use a particular setting: The (very) first election of former Ecuadorean President Rafael Correa in 2006. This election is relevant since the political candidate was an unknown figure in politics and won with a new political party, no congressmen, and no local candidates. Due to this reason, the vote share of this election provides a reasonably good proxy of initial affinity for a populist politician. Between 2006 and 2010 several institutional reforms, that dismantled checks and balances on the executive, were implemented and supported via direct referendums. I estimate an empirical model using the vote share in 2006 and the number of bureaucrats at the municipal level in 2010. I also use the growth rate between 2001 and 2010 of the number of bureaucrats as an alternative outcome. To mitigate endogeneity, I construct a broad measure of intrastate conflict and use it as an instrument. To construct this measure, I use geographical distances to episodes of conflict in the period 1984-1988 between the government of that time and subversive groups. Moreover, I control for several pre-1984 characteristics. Municipalities closer to conflict episodes voted more for Correa and have more bureaucratic jobs. Results are driven by the municipalities with the strongest initial affinity (highest vote share in 2006), hence pointing to a patronage story.
    Keywords: populism; tactical redistribution; state; conflict; Ecuador
    JEL: P16 P48 D72
    Date: 2022–08
  9. By: Bao-We-Wal BAMBE
    Abstract: This paper analyzes the effect of inflation targeting on private domestic investment in developing countries. Using propensity scores matching methods, thus mitigating tra- ditional self-selection problems, we find that inflation targeting has led to a 2.05 -2.53 percentage point increase in domestic investment in targeting countries compared to non- targeting ones. Estimates are economically meaningful and robust to various checks, notably sample changes, additional controls, alternative estimation methods, and falsifi- cation tests. A few heterogeneity features of the treatment effect are further highlighted, depending on some factors. Finally, we explore the main transmission channels and iden- tify monetary policy credibility as the key driver of the regime’s effectiveness.
    Keywords: Inflation targeting, Private domestic investment, Developing countries, Propensity score matching, Monetary policy credibility
    JEL: E51 E52 E51 E58 E62 E22
    Date: 2022–07

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