nep-dev New Economics Papers
on Development
Issue of 2023‒04‒10
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Trade Liberalization, Economic Activity, and Political Violence in the Global South: Evidence from PTAs By Amodio, Francesco; Baccini, Leonardo; Chiovelli, Giorgio; Di Maio, Michele
  2. Measuring vulnerability to multidimensional poverty in Latin América By Mauricio Gallardo; María Emma Santos; Pablo Villatoro; Vicky Pizarro
  3. Crop diversification increased household welfare in Afghanistan (2011-2017) By Hayatullah Ahmadzai; Oliver Morrissey
  4. Indian agriculture under climate change: The competing effect of temperature and rainfall anomalies By Gallé, Johannes; Katzenberger, Anja
  5. Employment options and challenges for rural households in Malawi: An agriculture and rural employment analysis of the fifth Malawi Integrated Household Survey, 2019/10 By Benson, Todd; De Weerdt, Joachim
  6. Intergenerational mobility in Latin America: the multiple facets of social status and the role of mothers By Matías Ciaschi; Mariana Marchionni; Guido Neidhöfer
  7. Inequality of opportunity and intergenerational persistence in Latin America By Paolo Brunori; Francisco H.G. Ferreira; Guido Neidhöfer
  8. Too Much of a Good Thing: Accelerated Growth and Crime By Soares, Rodrigo R.; Souza, Danilo
  9. Unbearable Costs: When Is Inflation Impeding Job Creation? Evidence from Sub-Saharan Africa By Rasmané Ouedraogo; Ibrahima Camara; Mr. Amadou N Sy
  10. Do effective governance and political stability facilitate the promotion of economic growth through natural resource rents? Evidence from Africa By Bannor, Frank; Magambo, Isaiah; Mubenga-Tshitaka, Jean Luc; Mduduzi, Biyase; Osei-Acheampong, Bismark
  11. On the direct and indirect effects of ICT on SMEs export performance. Evidence from Colombian manufacturing By Andrés Mauricio Gomez-Sanchez; Juan A. Máñez Castillejo; Juan Alberto Sanchis-Llopis

  1. By: Amodio, Francesco (McGill University); Baccini, Leonardo (McGill University); Chiovelli, Giorgio (Universidad de Montevideo); Di Maio, Michele (Sapienza University of Rome)
    Abstract: This paper investigates the impact of agricultural trade liberalization on economic activity and political violence in emerging countries. We use data on all Preferential Trade Agreements (PTAs) signed between 25 low- and middle-income countries and their high-income trade partners between 1995 and 2013. We exploit the implied reduction in agricultural tariffs over time combined with variation within countries in their suitability to produce liberalized crops to find that economic activity increases differentially in affected areas. We also find strong positive effects on political violence, and present evidence consistent with both producer- and consumer-side mechanisms: violence increases in more urbanized areas that are suitable to produce less labor-intensive crops as well as crops that are consumed locally. Our estimates imply that economic activity and political violence would have been around 2% and 7% lower, respectively, across countries in our sample had the PTAs not been signed.
    Keywords: political violence, trade, agriculture, preferential trade agreement
    JEL: D22 D24 F51 N45 O12
    Date: 2023–03
  2. By: Mauricio Gallardo; María Emma Santos; Pablo Villatoro; Vicky Pizarro
    JEL: I32 C51
    Date: 2021–11
  3. By: Hayatullah Ahmadzai; Oliver Morrissey
    Abstract: Crop diversification is a farm level strategy to augment income, improve food security, and mitigate risks attributable to climate and market shocks. We use three-waves (2011/12 to 2016/17) of nationally representative repeated cross section surveys to study the impact of crop diversification on household welfare, measured by real adult equivalent consumption and food expenditure and dietary diversity, in Afghanistan. A multinomial endogenous switching regression (MESR) with instruments to correct for selection bias and endogeneity originating from both observed and unobserved heterogeneity is used to estimate average treatment effects of moving from one crop to two crops and then to three or more crops. Our analysis shows that crop diversification is a welfare enhancing strategy that increases household consumption, food security and dietary diversity. This holds for households in high and low conflict districts although the effect varies and households experiencing conflict tend to divert spending to food from other consumption spending. We also find a positive association between conflict, market related shocks and crop diversification, suggesting that households can adopt diversification to improve food security and mitigate the negative impacts of shocks by spreading risk through a wider production portfolio.
    Keywords: Crop diversification, Household welfare, Multinomial endogenous switching regression (MESR), Conflict, Afghanistan
    Date: 2023
  4. By: Gallé, Johannes; Katzenberger, Anja
    Abstract: The latest generation of global climate models robustly projects that the summer monsoon rainfall in India will significantly increase in the 21st century due to global warming and that rainfall anomalies will occur more often. This raises the question of the impact of these changes on the agricultural yield. Based on annual district data for the years 1966-2014, we estimate the relationship between weather indices (amount of seasonal rainfall, number of wet days, average temperature) and the most widely grown kharif crops, including rice, in a flexible non-parametric way. We use this relationship in order to predict district-specific crop yield based on the climate projections of eight different climate models of the Coupled Model Intercomparison Project - phase 6 (CMIP6) under two global warming scenarios (Shared Socioeconomic Pathways SSP1-2.6 & SSP5-8.5) for the years 2021-2100 (short-term, mid-term, long-term). We find that the loss in rice yield by the end of the 21st century lies on average between 3 - 22% depending on the underlying emission scenario. Potential gains due to increasing rainfall are more than offset by the negative impacts of increasing temperature. Adaptation efforts in the worst case scenario (SSP5-8.5) would need to cut the negative impacts of temperature by 50% in order to reach the outcome of the sustainable scenario (SSP1-2.6).
    Keywords: Climate change, monsoon, agriculture, India
    JEL: Q10 Q54 O53
    Date: 2023
  5. By: Benson, Todd; De Weerdt, Joachim
    Abstract: Malawi has suffered from weak economic growth since its independence in 1964. Over 50 percentof the population live below the poverty line, unable to produce enough or to otherwise obtain sufficient income to meet all of their basic needs. Poverty is concentrated in rural areas. Smallholder agriculture dominates employment in rural Malawi. However, with continuing population growth, the average landholding size for smallholder farming households is declining, resulting in many being unable to produce sufficient food to meet their own needs. To escape poverty, rural households increasingly must diversify their sources of income, but many lack the human and financial capital to do so. In this report, a detailed examination is provided of the agricultural production, non-farm employment patterns, and overall incomes obtained by farming households across Malawi using data from the fifth Malawi Integrated Household Survey (IHS5), conducted in 2019/20. The analysis demonstrates that most poor farming households will never be able to escape poverty through their farming alone, even with substantially higher crop productivity. Rainfed cropping remains the primary form of agricultural production for farming households in Malawi. While increasing numbers are engaging in irrigated farming during the dry season, the returns from such farming are inconsistent and low. More importantly, off-farm income sources, particularly temporary ganyu wage employment, are now critical to the livelihoods of most rural households, particularly those with small cropland holdings. The common assumption that agriculture is at the center of the livelihoods of rural households across Malawi no longer holds. Of equal importance is their ability to obtain sufficiently remunerative off-farm employment. In developing strategies for rural economic and human development in Malawi, accelerating agricultural production growth, particularly through increased productivity, and increasing the returns to farming are necessary, but incomplete solutions. Equal attention must now be paid to how workers in farming households can also qualify for and obtain good off-farm jobs. Without increases in such employment opportunities, the economies of most rural communities across Malawi are likely to stagnate and poverty will deepen among households living in them.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; economic growth; poverty; income; rural areas; smallholder agriculture; employment; population growth; food; agricultural production; farming; irrigation; off farm employment; development strategies
    Date: 2023
  6. By: Matías Ciaschi; Mariana Marchionni; Guido Neidhöfer
    Keywords: Intergenerational Mobility, Education, Occupation, Mothers, Latin America.
    JEL: D63 J62
    Date: 2021–11
  7. By: Paolo Brunori; Francisco H.G. Ferreira; Guido Neidhöfer
    Abstract: How strong is the transmission of socio-economic status across generations in Latin America? To answer this question, we first review the empirical literature on intergenerational mobility and inequality of opportunity for the region, summarizing results for both income and educational outcomes.
    Keywords: Inequality of opportunities, Intergenerational Mobility, Latin America
    Date: 2023
  8. By: Soares, Rodrigo R. (Insper, São Paulo); Souza, Danilo (University of Sao Paolo)
    Abstract: We document that oil-producing areas of Brazil experienced increases in crime during the period of increased economic growth driven by the 2000s oil boom. This challenges the understanding that the impact of income shocks on crime is driven primarily by the legal status of the market in question. Offshore oil production, refining, and distribution in Brazil are concentrated in large firms, without scope for income contestability. We show that various equilibrium effects of the shock – such as increased inequality, urbanization, illegal goods presence, and deterioration in public goods provision – are likely to have contributed to the increase in crime.
    Keywords: crime, oil, income, Brazil
    JEL: H75 K42 Q34
    Date: 2023–03
  9. By: Rasmané Ouedraogo; Ibrahima Camara; Mr. Amadou N Sy
    Abstract: Covid-19 and war-induced commodity price fluctuations, and broadening price pressures have led to a surge in inflation in many sub-Saharan Africa (SSA) countries. To adjust to increasing costs, firms have resorted to several measures including shuttering offices, reducing businesses, laying off, and freezing hiring, thus putting at risk job creation and raising concerns of youth unemployment. This paper explores the effects of inflation on private employment growth in SSA using a large firm -level dataset from the World Bank’s Enterprise Surveys. We find a non-linear relationship between inflation and job creation in SSA, with job creation being negatively correlated with inflation rate when the latter is above 14 percent. This finding holds regardless of the sector of activities of firms and the exchange rate regime. In addition, the paper finds some differential effects based on the type of products. An increase in fuel prices tends to be more detrimental to job creation than food prices. The study also provides evidence that the state of implementation of structural reforms matters. The results show that inflation reduces job opportunities mostly in countries with bad or no structural reforms.
    Keywords: Inflation; Jobs; reforms; sub-Saharan Africa; broadening price pressure; evidence from Sub-Saharan Africa; Survey dataset; firm assessment; rising prices; Job creation; Exchange rate arrangements; Employment
    Date: 2023–03–03
  10. By: Bannor, Frank; Magambo, Isaiah; Mubenga-Tshitaka, Jean Luc; Mduduzi, Biyase; Osei-Acheampong, Bismark
    Abstract: This study explores the relationship between natural resources, governance, political stability, and economic growth in African countries. The study employs a robust econometric approach, the pooled mean group (PMG), to account for slope heterogeneity and cross-sectional dependency in the dataset. The study finds evidence that supports the resource curse hypothesis, which suggests that an abundance of natural resources can stifle economic growth. However, the study also finds that effective governance and political stability can mediate the negative impact of natural resource rents on economic growth. The findings suggest that investment in political stability, and effective governance, manifested through institutional quality, can directly boost economic growth in Africa. However, their indirect contribution can be maximized by linking them to natural resource utilization. The study recommends that policymakers prioritize the indirect contribution of effective governance, and political stability for transforming natural resource abundance into prosperity for resource-endowed African economies. This requires building credible and sustainable governance systems, particularly for natural resource revenue management and utilization. Additionally, political reforms should focus on building systems that prevent autocratic or corrupt political elites from solely benefiting from the physical control of natural resource rents.
    Keywords: Natural resource rents, resource curse hypothesis, governance, political stability, economic growth, Africa.
    JEL: O1 O13 O17
    Date: 2023–03–15
  11. By: Andrés Mauricio Gomez-Sanchez (Universidad del Cauca, Colombia.); Juan A. Máñez Castillejo (Universidad de Valencia and ERICES, Valencia, España.); Juan Alberto Sanchis-Llopis (Universidad de Valencia and ERICES, Valencia, España.)
    Abstract: The objective of this document is to explore the effect of ICT on the performance of Colombian manufacturing SMEs in export markets. To our knowledge, this is the first piece of evidence that explores this issue for an emerging economy. In doing so, we include some cutting-edge novelties such as persistence in export intensity; cross effect from imports to exports, and the role of initial conditions problem. We replicate the Tobit II-Heckman model procedure by using a dynamic Generalized Linear Model (GLM) because the export intensity is a proportion and include the inverse Mills ratio to deal with the selection problem. We merge three databases namely The Annual Manufacturing Survey (EAM); the Innovation and Technological Development Survey (EDIT) and the Annual ICT Manufacturing Survey (EAM-TIC); published by the National Administrative Department of Statistics (DANE) in six waves since 2013 to 2018. In general, our main results suggest that the impacts of information technologies on export intensity are always positive, regardless of the ICT analysed. Other results show persistence in exports, cross effects and self-selection in export markets, among others.
    Keywords: ICT, Exports, Sunk costs, Cross effects, Empirical Studies of Trade, Emerging economies, Empirical Analysis
    JEL: L16 L96 F14 O33 C23 D22 D24
    Date: 2023–04

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