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on Development |
| By: | Bernard Hoekman; Marco Sanfilippo; Margherita Tambussi |
| Abstract: | This paper analyzes the relationship between inward FDI and structural transformation of local labour markets in Africa. We combine geolocalized information on the distribution of FDI with a noveldatabase that provides information from 40, 665, 627 individuals in 2, 570 subnational units over the period 1987-2019. Results are suggestive of a positive effect of FDI on structural transformation.FDI contributes to an increase in employment, and shifts of workers towards modern industries and higher-skilled occupations. No effects are found on self-employment. Results are heterogeneous, reflecting the characteristics of the foreign investor and of the business activity undertaken by foreign firms in the local market. Geospatial analysis of changes in performance of domestic firms exposed to nearby FDI projects provides evidence of horizontal spillovers and inter-industry linkages, suggesting a complementary mechanism through which FDI drives structural change. |
| Keywords: | FDI, Jobs, Structural Transformation, Africa |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2023/02&r=dev |
| By: | Arlen Guarin; Juliana Londoño-Vélez; Christian Posso |
| Abstract: | Our study is the first to investigate the effects of reparations for victims of gross human rights violations. In Colombia, victims of forced displacement, homicide, and other atrocities during the conflict received a lump-sum payment equal to three times their annual household income. Using novel linked administrative microdata and event studies, we show that reparations help victims rebuild their lives and significantly improve their well-being and that of their children. Specifically, reparations promote investment in physical and human capital, leading to enhanced living and health conditions, better educational outcomes, and increased asset-building and entrepreneurship, despite slightly discouraging labor supply. **** RESUMEN: Nuestro estudio es el primero que investiga los efectos de las reparaciones para las víctimas de graves violaciones de los derechos humanos. En Colombia, las víctimas de desplazamiento forzado, homicidio y otras atrocidades durante el conflicto recibieron un pago único equivalente a tres veces sus ingresos familiares anuales. Utilizando novedosos microdatos administrativos y estudios de eventos, demostramos que las reparaciones ayudan a las víctimas a reconstruir sus vidas y mejoran significativamente su bienestar y el de sus hijos. En concreto, las reparaciones promueven la inversión en capital físico y humano, lo que se traduce en mejores condiciones de vida y de salud, mejores resultados educativos y un aumento de la creación de activos y del espíritu empresarial, a pesar de desincentivar ligeramente la oferta de trabajo formal. |
| Keywords: | Conflict reparations, cash transfers, formality, entrepreneurship, employment, home ownership, consumption, health, academic achievement and performance, Reparaciones por conflicto, transferencias de efectivo, formalidad, emprendimiento, empleo, propiedad de vivienda, consumo, salud, logro y desempeño académico |
| JEL: | D74 I38 H53 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1236&r=dev |
| By: | Batista, Catia (Nova School of Business and Economics); Vicente, Pedro C. (Nova School of Business and Economics) |
| Abstract: | Rural areas in Sub-Saharan Africa are typically underserved by financial services. Mobile money brings a substantial reduction in the transaction costs of remittances. We follow the introduction of mobile money for the first time in rural villages of Mozambique using a randomized field experiment. We find that mobile money increased migration out of these villages, where we observe lower agricultural activity and investment. At the same time, remittances received and welfare of rural households increased, particularly when facing geo-referenced village-level floods and household-level idiosyncratic shocks. Our work suggests that mobile money can accelerate urbanization and structural change in Sub-Saharan Africa. |
| Keywords: | mobile money, migration, remittances, investment, agriculture, structural change, technology adoption, insurance, Mozambique, Africa |
| JEL: | O12 O15 O16 O33 G20 R23 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16101&r=dev |
| By: | Dodlova, Marina (University of Passau); Carias, Michelle Escobar (Monash University); Grimm, Michael (University of Passau) |
| Abstract: | We assess the impact of the 2010 Haiti earthquake on children’s nutrition and education. We combine geo-coded shaking intensity data with four waves of the Haiti Demographic Health Survey, two administered before and two after the earthquake. We find lasting negative impacts of the earthquake on children's stunting and wasting as well as on school enrolment and attendance. A one standard deviation increase in shaking intensity raises infant stunting by 0.08 standard deviations and wasting by 0.04 standard deviations. Our estimates account for the millions in aid funds allocated by the World Bank to overcome the earthquake's aftermath. This aid mitigated but could not fully prevent the adverse effects on children's health and education. The results are robust to alternative specifications and different measures of exposure to the earthquake. Our results highlight the need for aid in poor areas affected by natural disasters to prevent infant malnutrition and poor education. Reduced children's health and education will have lasting private and social costs, which could easily exceed the necessary costs to counter these effects. |
| Keywords: | natural disasters, earthquake, nutrition, education, school attendance, Haiti |
| JEL: | I15 I25 Q54 O10 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16195&r=dev |
| By: | Amare, Mulubrhan; Balana, Bedru |
| Abstract: | This paper combines panel data from nationally representative household-level surveys in Nigeria with long-term satellite-based spatial data on temperature and precipitation using geo-referenced information related to households. It aims to quantify the impacts of climate change on agricultural productivity, income shares, crop mix, and input use decisions. We measure climate change in harmful degree days, growing degree days, and changes in precipitation using long-term (30 year) changes in temperature and precipitation anomalies during the crop calendars. We find that, controlling for other factors, a 15 percent (one standard deviation) increase in change in harmful degree days leads to a decrease in agricultural productivity of 5.22 percent on average. Similarly, precipitation change has resulted in a significant and negative impact on agricultural productivity. Our results further show that the change in harmful degree days decreases the income share from crops and nonfarm self-employment, while it increases the income share from livestock and wage employment. Examining possible transmission channels for this effect, we find that farmers change their crop mix and input use to respond to climate changes, for instance reducing fertilizer use and seed purchases as a response to increases in extreme heat. Based on our findings, we suggest policy interventions that incentivize adoption of climate-resilient agriculture, such as small-scale irrigation and livelihood diversification. We also propose targeted pro-poor interventions, such as low-cost financing options for improving smallholders’ access to climate-proof agricultural inputs and technologies, and policy measures to reduce the inequality of access to livelihood capital such as land and other productive assets. |
| Keywords: | NIGERIA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; household surveys; data; spatial data; temperature; precipitation; climate change; agricultural productivity; income; crops; inputs; nonfarm income; livestock; policies; irrigation; diversification; finance |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:2185&r=dev |
| By: | Hossain, Md Shahadath (University of Houston); Nikolov, Plamen (Harvard Institute for Quantitative Social Science) |
| Abstract: | Non-unitary household models suggest that enhancing women's bargaining power can influence child health, a crucial determinant of human capital and economic standing throughout adulthood. We examine the effects of a policy shift, the Hindu Succession Act Amendment (HSAA), which granted inheritance rights to unmarried women in India, on child health. Our findings indicate that the HSAA improved children's height and weight. Furthermore, we uncover evidence supporting a mechanism whereby the policy bolstered women's intra-household bargaining power, resulting in downstream benefits through enhanced parental care for children and improved child health. These results emphasize that children fare better when mothers control a larger share of family resources. Policies empowering women can yield additional positive externalities for children's human capital |
| Keywords: | human capital, height, bargaining, parental investments, developing countries, India |
| JEL: | D13 I12 I13 J13 J16 J18 K13 O12 O15 Z12 Z13 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16193&r=dev |
| By: | Kai Gehring; Paul Schaudt |
| Abstract: | We provide novel evidence of how an innovative market-based solution using remote-sensing technology can mitigate conflict. Droughts are a major driver of conflict in Africa, particularly between nomadic pastoralists and sedentary farmers, and climate change is predicted to intensify this problem. The Index-Based Livestock Insurance (IBLI) scheme piloted in Kenya provides automated, preemptive payouts to pastoralists affected by droughts. Combining plausibly exogenous variation in rainfall and the staggered roll-out of IBLI in Kenya over the 2001-2020 period, we find that IBLI strongly reduces drought-induced conflict. One key mechanism is that insured pastoralists travel less far away from their ancestral homelands, reducing conflicts over scarce resources in contested areas. This suggests that market-based solutions are a promising pathway to mitigate conflict beyond difficult institutional reforms and raises the question of how governments can support the adoption of such schemes for underprivileged groups through subsidies or other campaigns. |
| Keywords: | conflict, conflict resolution, climate change, droughts, pastoralism, insurance, ICT, resources |
| JEL: | D74 G22 G52 O13 Q34 Q54 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10423&r=dev |
| By: | Henri Casella; Jaime de Melo |
| Abstract: | The paper reports on evidence on how trade can help Africa adapt to Climate Change (CC) along three dimensions: (i) fast-onset events from short-lived extreme occurrences (floods, extreme temperatures); (ii) slow-onset events (rise in average temperatures and sea-level rise); (iii) trade facilitation policies.• Fast onset events. Trade reduces the amplitude of extreme events like a drought. But policy reactions to large shocks can increase the amplitude of the shock. During the South African drought of 2015-6, policies had spillovers in neighboring countries. Following the 2008-09 financial crisis, export restrictions by major crop exporters and reduction in tariffs by importers amplified the shock. Policy coordination is needed to control spillover effects.• Slow-onset events. Modelling efforts have concentrated on exploring the ‘margins’ of adjustment to CC: changes in production levels of existing crops; switches in crops; changes in land utilization; labor relocating to urban areas/migration; adjustments in the volume of trade at different scales (regional or international). All reviewed models show that enlarging the channels of adjustment mitigate the amplitude of the loss in welfare from expected CC over the 21st Century. Decomposing the welfare changes suggests two conclusions. First adjustments in crop selection and in bilateral trade partners contribute approximately equally to reducing the costs of adjustments. Second, the expected sharp increase in food prices resulting from warming is likely to hit SSA most strongly.• Trade facilitation. A functioning global trading system is a public good to become more valuable under CC. Free and unfettered access to global food (and other key) supplies must be ensured, especially for Africa. This requires a rapprochement between the trade and climate regimes. As an entry point, besides dealing with harmful subsidies (fossil fuels, fisheries), developed countries could conclude a plurilateral Environmental Goods Agreement (EGA) that would be a triple win for trade, for the environment, and for African agriculture that needs tariff-free access to climate-Adaptation related EGs (AEGs). The paper documents the magnitude of tariffs on Environmental Goods.The paper concludes that African countries could improve the functioning of the continental policy architecture by several measures. First by excluding AEGs from exclusion lists on the AfCFTA while simultaneously reducing their barriers to trade on AEGs and EPPs. Second, preserving the environment should be mainstreamed in the African trade architecture by including environmental provisions. |
| Keywords: | Climate change, adaptation, Africa, Environmental goods |
| JEL: | Q50 Q56 F18 F64 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2022/56&r=dev |
| By: | Pushkar Maitra (Department of Economics, Monash University); Sandip Mitra (Sampling and Official Statistics Unit, Indian Statistical Institute); Dilip Mookherjee (Department of Economics, Boston University); Sujata Visaria (Department of Economics, The Hong Kong University of Science and Technology) |
| Abstract: | As in many other parts of the world, India has witnessed a surge in the popularity of the Bharatiya Janata Party (BJP), a right wing nationalist party. This paper examines the respective roles of economic policy and “identity politics†for the sharp rise in support for BJP in a region where it had a negligible vote share until 2014. Using household level panel data from 3500 rural households in West Bengal, we examine the effect of different welfare benefits delivered by state and national governments, on support for the regional incumbent (Trinamool Congress (TMC)) and the BJP after 2014. We find that receipt of these benefits was associated with increased support for the respective party controlling either level of government. However, changes in scale, effectiveness, composition or targeting of these benefits cannot account for the large observed increase in the relative popularity of the BJP. We also find no evidence of any association with post-2014 economic distress of the household, or political violence attributed to TMC party activists in the 2018 local government elections. On the other hand, religion, tribal and immigrant status of households are strong and robust predictors of changes in political support, irrespective of controls for welfare benefits and household incomes. Hence the results indicate that the BJP’s rise in West Bengal reflected the growing importance of identity politics per se, rather than economic policies. |
| Keywords: | clientelism, identitypolitics, rightwingnationalism, WestBengal, federalism |
| JEL: | H31 H42 H75 P16 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:hke:wpaper:wp2023-01&r=dev |
| By: | Islam, Asad (Monash University); Lee, Wang-Sheng (Monash University); Triyana, Margaret (Nanyang Technological University, Singapore); Xia, Xing (affiliation not available) |
| Abstract: | Workers in small businesses in low- and middle-income countries are exposed to significant risks of occupational accidents and illnesses. A safe and healthy workplace could improve the productivity and sustainability of the business. In this paper, we conduct a randomized controlled trial in Bangladesh that provides informal firms with information on occupational health and safety (OHS) to improve their workplace practices. The intervention comprised two treatment arms: one focused solely on OHS training (the OHS arm), while the other offered business training and access to financing in addition to OHS training (the OHS+Biz arm). After two years, treated firms showed improvements in business practices, particularly those related to safety and a decent work environment. Moreover, both treatment arms experienced increased output and sales revenue. The OHS+Biz arm generally had no additional impact on firm outcomes compared to the OHS arm, suggesting that OHS information is the primary factor driving safer and healthier workplaces, which consequently can lead to better firm outcomes. |
| Keywords: | occupational health and safety, enterprise training, randomized controlled trial, informal economy, information, credit access |
| JEL: | J28 C93 J81 I15 M53 J24 O14 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16150&r=dev |
| By: | Fabio Santeramo; Lerato Phali |
| Abstract: | Although South Africa is one of the biggest economies in Africa, poverty and income inequality persist and a vast number of households lack access to water and sanitation services. Provincial governments have implemented the Provincial Development and Growth Strategy to improve standards. We evaluate its effects on selected development indicators. Using a generalization of the Difference-in-Differences method, we study the effects on four development indicators: food security, economic well-being, and water and sanitation security. We use secondary data from the General Household Survey, collected between 2002-2017 and conclude that i) the policies improve development indicators; ii) the effects are heterogeneous across racial and geographic distributions of households.Long-term economic stimulators, such as employment opportunities and education for vulnerable communities, are needed to improve household welfare across the provinces. Programs emanating from these development policies should be ongoing and continuously adapted to fulfill the specific needs of the local groups. |
| Keywords: | Provincial Development and Growth Strategies, Provincial Poverty Reduction Strategies, development indicators, Difference-in-Differences, Roll-out-of program approach |
| JEL: | O12 O38 Q18 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2023/32&r=dev |
| By: | Luong, Tuan |
| Abstract: | We explore the relationship between risk aversion, loss aversion, and procrastination and the resilience of trading networks in small scale rural farming in Vietnam. Rural farmers are highly dependent on intermediary traders to bring products to market. We survey farming households in three villages to obtain data on the trading network. We find that each village has a very distinctive trading network but none of them are resilient, with the typical farmer relying on one or two traders with whom they have traded for many years. In one village, with the most resilient network, we find evidence that risk aversion and loss aversion is associated with a household engaging with, respectively, more and less traders. In a separate village, the one with the fewest number of traders, we find a positive relationship between procrastination and the number of trading links. |
| Keywords: | Risk and Uncertainty, International Relations/Trade |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc23:334556&r=dev |
| By: | Gonzalez, Felipe; Straub, Stéphane; Miquel-Florensa, Josepa; Prem, Mounu |
| Abstract: | Transportation infrastructure is associated with economic development, but it can also be used for social control and to benefit the governing elite. We explore the connection between the construction of road networks, state-led repression, and land allocations in the longest dictatorship in South America: Alfredo Stroessner military regime in Paraguay. Using novel panel data from the truth and reconciliation commission, we show that proximity to roads facilitated state-led repression and the illegal allocation of agricultural plots to dictatorship allies. These results suggest that infrastructure projects can also hinder economic development. |
| Keywords: | roads, repression, land allocations, dictatorship, Paraguay, Alfredo Stroessner. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128127&r=dev |
| By: | Bernard Hoekman; Marco Sanfilippo; Filippo Santi |
| Abstract: | Using detailed administrative data, this paper analyzes the relationship between participation in public procurement (selling to government entities) and firm performance in Uganda. We find positive associations with total sales, gross profits, total compensation of employees, number of workers and sales per employee. Overall sales growth associated with selling to government entities is partly at the expense of a reallocation of firm-level supply away from nongovernment buyers, suggesting there may be short-term capacity expansion constraints. The results are substantiated in an event study approach that accounts for potential self-selection of firms into government procurement, as well as the heterogeneity in timing of selection into public procurement. The reduction in sales to private sector is persistent. It is less acute for firms in services, and within services, among firms that use low-skill labor, suggesting capacity constraints may not be only short term. |
| Keywords: | Public procurement, Industrial policy, Government demand, Firm performance, Economic development, Services |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2022/54&r=dev |
| By: | Debalke, Negash Mulatu |
| Abstract: | Covid-19 affects food security of households through different pathways. Studies from developing countries show that the pandemic had heterogeneous impacts on food security across various groups of households. This study aims to examine the trajectory of and differential impacts of the early days of the pandemic on food security in Ethiopia along households’ location, ownership of assets and varying livelihoods and income sources. Using the World Bank’s harmonized panel data on households drawn from the high frequency phone survey, the study undertakes fixed effects regressions. The results indicated that Covid-19 pandemic had a statistically significant impact, but a declining trend, on overall food insecurity in Ethiopia. Households in urban areas have faced a higher chance of being severely food insecure than those in rural, while those households that rely more on the agriculture have a lower odds of being food insecure. Ownership of livestock decreases probability of being severely food insecure. Besides, households whose income source was rental and wage employment were significantly exposed to food insecurity due to the pandemic. Moreover, the results identified significant heterogeneity of the impacts between households with and without receiving remittance and assistance. This suggests the important role of social protection in guarding households from food insecurity during the pandemic in the short term. Overall, the paper determined that living in rural/urban, ownership of land and livestock, rental income, remittance, assistance and wage employment are statistically significant indicators of heterogeneity in the pandemic’s impacts on food insecurity. |
| Keywords: | Covid-19; Pandemic; Impacts; Food insecurity; Heterogeneity; Trajectory |
| JEL: | O55 |
| Date: | 2023–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117490&r=dev |
| By: | Duryea, Suzanne (Inter-American Development Bank); Ribas, Rafael Perez (Boise State University); Sampaio, Breno (Universidade Federal de Pernambuco); Sampaio, Gustavo R. (Universidade Federal de Pernambuco); Trevisan, Giuseppe (Universidade Federal de Pernambuco) |
| Abstract: | This paper investigates the long-term impact on earnings of attending a tuition-free, top-quality university in Brazil. We identify the causal effect through a sharp discontinuity in an admission process based on test scores. If admitted, low-income students are found to increase their earnings by 26% ten years later. However, admission has a small and insignificant effect on high-income students. The difference between income groups is not explained by educational attainment, program choice, or selection into better-paying jobs. The evidence suggests that most low-income applicants, if not admitted, still graduate from college but with much lower returns to education. High-income applicants who just miss the cutoff, however, can find other opportunities such that earnings trajectories are unchanged. Our results underscore the role of affordable higher education in promoting social mobility. |
| Keywords: | college wage premium, affordability, school quality, income groups |
| JEL: | H52 I23 I26 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16192&r=dev |
| By: | Bernard Hoekman; Matteo Fiorini; Dennis Quinn |
| Abstract: | This paper assesses the potential impacts of services trade liberalization for a sample of African countries. The focus is on the relationship between labour productivity of manufacturing sectors and two types of services trade-related policies – restrictions on foreign direct investment (FDI) in services and restrictions on international payments for invisibles. The analysis takes in account differences across manufacturing sectors in the intensity of use of different services as inputs into production as well as difference in the quality of economic governance across countries. We find that services trade liberalization may have substantial positive impacts on the performance of manufacturing sectors, and increase with services input intensity and the quality of governance. |
| Keywords: | Services trade policy, services input use, manufacturing productivity, Africa, regional integration |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2022/75&r=dev |
| By: | Paul Makdissi (Department of Economics, University of Ottawa, Canada); Myra Yazbeck (Department of Economics, University of Ottawa, Canada) |
| Abstract: | In this paper, we propose a new analytical approach to inequality of opportunity that allows for the decomposition of the impact of initial circumstances into the impact of social class at birth and the impact of social stratification based on an identity marker in a society in which there is a dominant and a marginalized group. We derive the dominance conditions associated with this approach. These dominance conditions allow for robust rankings of distributions. We also explore two potential views on the inequality of opportunity: the pro-poor and the meritocratic perspectives. To make the identification of all robust orderings implementable using survey data, we discuss an estimation approach and statistical inference for these dominance tests. Finally, to illustrate the empirical relevance of the proposed dominance conditions, we use data from the Egyptian Labor Market Panel Surveys for 1998, 2006, 2012, and 2018 to study the changes in inequality of opportunity and the change in the contributions of social class at birth and gender stratification over this period in Egypt. |
| Keywords: | Inequality of opportunity, stochastic dominance, stratification. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2303e&r=dev |
| By: | Matteo Neri-Lainé; Gianluca Orefice; Michele Ruta |
| Abstract: | This paper studies the effect of regional trade agreements on firms’ exports. Using detailed information on the content of trade agreements and firm-level exports for 31 developing countries between 2000 and 2020, the analysis shows that the depth of trade agreements matters for the export performance of firms. Moving from shallow to deep trade agreements boosts firms’ exports, on average, by 3.6 percent. In line with models of trade with heterogeneous firms and mark-ups, the trade impact of deep trade agreements depends on the firm’s characteristics. The impact is stronger for large firms and firms involved in global value chains and is negative for small firms. Robustness tests, an event study approach and an Instrumental Variable strategy confirm the causal interpretation of the results. These heterogeneous impacts on firms’ exports imply a selection (pro-competitive) effect of deep trade agreements with significant welfare consequences for signatory countries. |
| Keywords: | deep trade agreements, exports, firm heterogeneity, developing countries |
| JEL: | F13 F14 F15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10436&r=dev |