nep-dev New Economics Papers
on Development
Issue of 2023‒09‒11
nine papers chosen by
Jacob A. Jordaan, Universiteit Utrecht

  1. Taxation and Accountability in sub-Saharan Africa By Roel Dom; Oliver Morrissey; Abrams Tagem
  2. Air Pollution and Agricultural Productivity in a Developing Country By Merfeld, Joshua D.
  3. Rural roads infrastructure and women empowerment in India By Nandwani, Bharti; Roychowdhury, Punarjit
  4. Political violence and economic activity in Bangladesh: A robust empirical investigation By Christophe Muller; Ahmed Yousuf
  5. The Value of Clean Water: evidence from an environmental disaster By Rodrigo Barbone Gonzalez; José Renato Haas Ornelas; Thiago Christiano Silva
  6. The Effects of Climate Change in the Poorest Countries: Evidence from the Permanent Shrinking of Lake Chad By Remi Jedwab; Federico Haslop; Roman Zarate; Carlos Rodriguez-Castelan
  7. Coping with Climate Shocks: Food Security in a Spatial Framework By Diogo Baptista; John A Spray; Ms. Filiz D Unsal
  8. When Women's Work Disappears: Marriage and Fertility Decisions in Peru By Mansour, Hani; Medina, Pamela; Velasquez, Andrea
  9. How Nations Become Fragile: An AI-Augmented Bird’s-Eye View (with a Case Study of South Sudan) By Tohid Atashbar

  1. By: Roel Dom; Oliver Morrissey; Abrams Tagem
    Abstract: Taxation can contribute to state-building through a tax bargain in which taxpayers are willing to increase compliance in return for improved government accountability. There is limited evidence for this in sub-Saharan Africa (SSA) where it is argued that the fiscal state is weak, with low tax revenues and governments that are not accountable. However, since the early 2000s, SSA countries on average have increased tax/GDP ratios significantly and there have also been increases in measures of accountability. Has the increase in taxation promoted improved accountability? This paper analyses data for up to 47 African countries from 1980 to 2019 and shows a robust positive correlation between tax revenue and accountability. Instrumental variable estimation provides support for a causal interpretation. The effect of taxation is only observed for vertical accountability (capturing the quality of elections and party competition), not for other measures of accountability capturing the role of civil society or the judiciary, consistent with the emergence of a tax bargain. Furthermore, we show that the tax effect is one of the significant determinants of vertical accountability.
    Keywords: tax revenue, vertical accountability, tax bargain, sub-Saharan Africa
    Date: 2023
  2. By: Merfeld, Joshua D. (KDI School of Public Policy and Management)
    Abstract: I document negative externalities of air pollution in the Indian agricultural sector. Using variation in pollution induced by changes in wind across years, I show that higher levels of pollution lead to decreased agricultural productivity, with large changes in productivity being common. The negative effects of pollution are larger in areas growing more labor-intensive crops, indicating that the pollution works at least partly through direct effects on labor productivity. Finally, combining wind direction with the rollout of coal plants, results indicate that pollution from coal plants has a larger effect on agricultural productivity than other types of pollution. Given that the agricultural sector is a refuge for the poor in many developing countries, these results suggest that the negative externalities of pollution may hit the poorest particularly hard.
    Keywords: pollution, productivity, agriculture, labor, India
    JEL: H40 I15 J22 O13 Q52 Q53
    Date: 2023–07
  3. By: Nandwani, Bharti; Roychowdhury, Punarjit
    Abstract: The paper examines the impact of a rural roads construction program in India on women's outcomes. While spatial integration can provide women with increased education and employment opportunities, the extent of benefits might be limited by underlying gender norms. We identify the impact of the policy by exploiting the program rule that assigned roads based on the village population. Using a two-way fixed effect methodology, we find that increase in rural roads construction lowers mobility restrictions faced by women and improves norms around domestic violence. However, the result are mixed with respect to participation in other decision making and financial autonomy. Additionally, while we find positive impact on education, there is no impact on employment outcomes for females. We argue that a possible reason for a partial improvement in women outcomes could be gendered impact of the policy - men benefit more in terms of employment than women.
    Keywords: Gender Norms, India, Roads, Women Empowerment
    JEL: J16 O12
    Date: 2023
  4. By: Christophe Muller (Aix-Marseille Sciences Economiques); Ahmed Yousuf (Aix Marseille Université Économiques)
    Abstract: Using daily and monthly level nightlight products from the National Aeronautics and Space Administration (NASA) Black Marble suite (NASA and Administration (2199)) and extrapolating hartal-related violence data with a keyword search from the geocoded Armed Conflict Location & Event Data Project (ACLED) database, we investigate the impact of such events on economic activity in Bangladesh. We focus our investigation first at daily level and secondly at monthly level. At daily level, we utilize autoregressive conditional heteroskedasticity (ARCH) estimation to factor in the deeply autoregressive nature of daily nightlights, to identify immediate (within-day) effects from hartals, individually for key subdistricts. At the monthly level, to factor in the emergent consequent spatial dependence, we analyze countrywide dynamics using a split-panel jackknife bias-corrected maximum-likelihood estimations to see overall effects from lagged hartal event counts. At daily level, over 2012–21, in the capital Dhaka, we find that daily hartals have an immediate statistically significant impact of -0.9 percent on daily nightlights. However, this effect does not hold across all subdistricts and only does so for a select number of subdistricts. At the monthly level, we find evidence of statistically significant countrywide effects of 1.6 percent.
    Date: 2023–08–11
  5. By: Rodrigo Barbone Gonzalez; José Renato Haas Ornelas; Thiago Christiano Silva
    Abstract: Clean water has a largely unknown economic value, particularly to small communities whose agricultural activities grow on river shores. In November 2015, the rupture of a mining tailings dam in the municipality of Mariana led to a record disposal of toxic residuals in southeast Brazil. A mud avalanche ran out for 600 km (373 miles) until it reached the Atlantic Ocean, leaving behind extreme ecological and economic damage in the Doce River basin. This is the largest environmental disaster in Brazil to date. We quantify the negative externalities using rich, identified, and comprehensive data from firm-to-firm electronic payments and individual-level consumer credit usage. We find that agricultural producers in affected municipalities received cumulatively 41% to 60% fewer inflows (income) from customer firms outside the affected zone three years after the disaster. Effects are driven by municipalities where the river shore is larger relative to the farming area. In these municipalities, individuals also faced an 8% fall in their credit card and consumer finance expenditures. This result is stronger for non-formal and high-risk workers. Thus, water contamination led to (first) production and (later) consumption decline with real effects on municipality-level agriculture and services’ output, causing a 7% decline in local GDP.
    Date: 2023–08
  6. By: Remi Jedwab (George Washington University); Federico Haslop (George Washington University); Roman Zarate (World Bank); Carlos Rodriguez-Castelan (World Bank)
    Abstract: Empirical studies of the economic effects of climate change (CC) largely rely on climate anomalies for causal identification purposes. Slow and permanent changes in climate-driven geographical conditions, i.e. CC as defined by the IPCC (2013), have been studied relatively less, especially in Africa which remains the most vulnerable continent to CC. We focus on Lake Chad, which used to be the 11th-largest lake in the world. This African lake the size of El Salvador, Israel, or Massachusetts slowly shrunk by 90% for exogenous reasons between 1963 and 1990. While water supply decreased, land supply increased, generating a priori ambiguous effects. These effects make the increasing global disappearance of lakes a critical trend to study. For Cameroon, Chad, Nigeria, and Niger - 25% of sub-Saharan Africa's population –, we construct a novel data set tracking population patterns at a fine spatial level from the 1940s to the 2010s. Difference-in-differences show much slower growth in the proximity of the lake, but only after the lake started shrinking. These effects persist two decades after the lake stopped shrinking, implying limited adaptation. Additionally, the negative water supply effects on fishing, farming, and herding outweighed the growth in land supply and other positive effects. A quantitative spatial model used to rationalize these results and estimate aggregate welfare losses taking into account adaptation shows overall losses of about 6%. The model also allows us to study the aggregate and spatial effects of policies related to migration, land use, trade, roads, and cities.
    Keywords: Climate Change; Aridification; Shrinkage of Lakes; Natural Disasters; Environment; Water Supply; Land Supply; Rural Decline; Agricultural Sectors; Adaptation; Land Use; Africa
    JEL: Q54 Q56 Q15 Q20 R11 R12 O13 O44
    Date: 2023–06
  7. By: Diogo Baptista; John A Spray; Ms. Filiz D Unsal
    Abstract: We develop a quantitative spatial general equilibrium model with heterogeneous house-holds and multiple locations to study households’ vulnerability to food insecurity from cli-mate shocks. In the model, households endogenously respond to negative climate shocks by drawing-down assets, importing food and temporarily migrating to earn additional income to ensure sufficient calories. Because these coping strategies are most effective when trade and migration costs are low, remote households are more vulnerable to climate shocks. Food insecure households are also more vulnerable, as their proximity to a subsistence requirement causes them to hold a smaller capital buffer and more aggressively dissave in response to shocks, at the expense of future consumption. We calibrate the model to 51 districts in Nepal and estimate the impact of historical climate shocks on food consumption and welfare. We estimate that, on an annual basis, floods, landslides, droughts and storms combined generated GDP losses of 2.3 percent, welfare losses of 3.3 percent for the average household and increased the rate of undernourishment by 2.8 percent. Undernourished households experience roughly 50 percent larger welfare losses and those in remote locations suffer welfare losses that are roughly two times larger than in less remote locations (5.9 vs 2.9 percent). In counterfactual simulations, we show the role of better access to migration and trade in building resilience to climate shocks.
    Keywords: Agriculture; Food Security; Trade, Migration; Climate change; Climate shocks
    Date: 2023–08–11
  8. By: Mansour, Hani (University of Colorado Denver); Medina, Pamela (University of Toronto); Velasquez, Andrea (University of Colorado Denver)
    Abstract: This paper studies the gendered labor market and demographic effects of trade liberalization in Peru. To identify these effects, we use variation in the exposure of local labor markets to import competition from China based on their baseline industrial composition. On average, the increase in Chinese imports during 1998-2008 led to a persistent decline in the employment share of low-educated female workers but had smaller and transitory effects on the employment of low-educated men. In contrast to the predictions of Becker's model of household specialization, we find that the increase in import competition during this period increased the share of single low-educated people and decreased their marriage rates. There is little evidence that import competition affected fertility decisions. The results highlight the role of gains from joint consumption in marriage formation.
    Keywords: import competition, marriage formation, fertility
    JEL: J16 J12 J13 J23
    Date: 2023–08
  9. By: Tohid Atashbar
    Abstract: In this study we introduce and apply a set of machine learning and artificial intelligence techniques to analyze multi-dimensional fragility-related data. Our analysis of the fragility data collected by the OECD for its States of Fragility index showed that the use of such techniques could provide further insights into the non-linear relationships and diverse drivers of state fragility, highlighting the importance of a nuanced and context-specific approach to understanding and addressing this multi-aspect issue. We also applied the methodology used in this paper to South Sudan, one of the most fragile countries in the world to analyze the dynamics behind the different aspects of fragility over time. The results could be used to improve the Fund’s country engagement strategy (CES) and efforts at the country.
    Keywords: Fragile and Conflict-Affected States; Fragility Trap; Fragility Syndrome; Machine Learning; Artificial Intelligence
    Date: 2023–08–11

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