nep-dev New Economics Papers
on Development
Issue of 2023‒11‒06
fifteen papers chosen by
Jacob A. Jordaan, Universiteit Utrecht

  1. Will economic growth be sufficient to end global poverty?: New projections of the UN Sustainable Development Goals By Arief Anshory Yusuf; Zuzy Anna; Ahmad Komarulzaman; Andy Sumner
  2. Does foreign aid reduce migration? By Fuchs, Andreas; Gröger, André; Heidland, Tobias; Wellner, Lukas
  3. The (perceived) quality of agricultural technology and its adoption: Experimental evidence from Uganda By Miehe, Caroline; Sparrow, Robert; Spielman, David; Van Campenhout, Bjorn
  4. Labor Informality and Market Segmentation in Senegal By Carlos Rodríguez-Castelán; Emmanuel Vazquez
  5. Adoption and impacts of agricultural technologies and sustainable natural resource management practices in fragile and conflict affected settings: A review and meta-analysis By Nshakira-Rukundo, Emmanuel; Tabe-Ojong, Martin Paul Jr.; Gebrekidan, Bisrat Haile; Agaba, Monica; Surendran-Padmaja, Subash; Dhebibi, Boubaker
  6. Preparing for an Aging Africa: Data-Driven Priorities for Economic Research and Policy By Madeline E. Duhon; Edward Miguel; Amos Njuguna; Daniela Pinto Veizaga; Michael W. Walker
  7. Technology adoption constraints and Laser Land Levelling: evidence from Karnataka, India By Lisa Capretti
  8. Ethnic diversity and financial inclusion in post-apartheid South Africa By Isaac Koomson; Michael Danquah; Edward Martey
  9. The Relationship between Child Marriage and Female Educational Attainment in India By Duggal, Khushi
  10. Does Agricultural Intensification Pay? By Aihounton, Ghislain; Christiaensen, Luc
  11. Natural Resource Windfalls In Nonproducing Areas By Ome, Alejandro; Pérez, Javier
  12. Financial inclusion in South Africa - Influencing factors and public policy By Marybeth-Rouse; Bernardo Batiz-Lazo; Santiago Carbo-Valverde
  13. The Within-Country Distribution of Brain Drain and Brain Gain Effects: A Case Study on Senegal By Bocquier, Philippe; Cha’Ngom, Narcisse; Docquier, Frédéric; Machado, Joël
  14. More Internet for More Employment and Earnings: A Causal Estimation for Costa Rica By Boza-Núñez, Efraín; Vargas-Montoya, Luis; Robalino, Juan
  15. Allocative Efficiency of Government Spending for Growth in Latin American Countries By Pessino, Carola; Altinok, Nadir; Chagalj, Cristian

  1. By: Arief Anshory Yusuf; Zuzy Anna; Ahmad Komarulzaman; Andy Sumner
    Abstract: In this paper, we present new projections for a range of global poverty-related Sustainable Development Goals (SDGs), specifically, extreme monetary poverty, undernutrition, stunting, child mortality, maternal mortality, and access to clean water and basic sanitation. Our projections, based on economic growth forecasts, take into account recent global shocks such as the COVID-19 pandemic and the inflation shock. Our findings indicate that economic growth alone will not be sufficient to end global poverty, and the global poverty-related SDGs will not be met by a considerable distance.
    Keywords: Poverty, Growth, Nutrition, Health, Inequality, SDGs
    Date: 2023
  2. By: Fuchs, Andreas; Gröger, André; Heidland, Tobias; Wellner, Lukas
    Abstract: The widespread use of foreign aid to address the "root causes" of irregular migration lacks a robust empirical foundation. In a new study (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global Micro-Evidence from World Bank Projects. Kiel Working Paper 2257) that we summarize here for a wider audience, we provide the first comprehensive causal analysis that examines micro-level evidence across all developing countries that received assistance from the World Bank between 2008 and 2019. Our analysis is the first to disentangle the impacts of foreign aid on various aspects of migration: individuals' aspirations, capabilities, and actual migration patterns. In alignment with the notion of utilizing aid to mitigate the root causes of irregular migration, our study reveals that the announcements and disbursements of new aid projects significantly reduce people's migration aspirations. This effect is temporary in nature and is notably absent in fragile countries. Over the longer term, the critical factor is whether aid ultimately enhances living conditions. Our findings provide some evidence supporting this, as improvements in living conditions bolster individuals' capabilities. This can lead to increased migration, yet the notable difference is that these individuals tend to follow regular channels for migration. These findings hold substantial significance for policymakers and those involved in foreign aid allocation that we discuss towards the end of this policy brief.
    Keywords: Migration, Foreign Aid, Root causes, Irregular migration, Refugees, Asylum, Development, Migration, Entwicklungshilfe, Fluchtursachen, Irreguläre Migration, Flüchtlinge, Asyl, Entwicklung
    Date: 2023
  3. By: Miehe, Caroline; Sparrow, Robert; Spielman, David; Van Campenhout, Bjorn
    Abstract: Recently, issues related to the (perceived) quality of inputs and technologies have been proposed as an important constraint to their adoption by smallholder farmers in low income countries. Taking maize seed embodying genetic gain as a case, we train random agro-dealers to test whether under-adoption by farmers is caused by low quality due to sellers' lack of knowledge about proper storage and handling. In a second hypothesis, we randomly introduce an information clearinghouse similar to popular crowd-sourced review platforms such as or to test whether information asymmetries crowd out quality seed. We find that the information clearinghouse treatment improves outcomes for both agro-dealers and farmers, with agro-dealers receiving more customers and reporting higher revenues from maize seed sales, and farmers reporting significantly higher use of improved maize seed varieties obtained from agro-dealers, leading to higher maize productivity after two seasons. The primary mechanisms behind this impact appear to be an increased effort to signal quality by agro-dealers and a general restoration of trust in the market for improved seed. The agro-dealer training does not have a clear impact on agro-dealers, nor on farmers in associated catchment areas. However, we do find that the information clearinghouse increases agro-dealer knowledge about proper seed storage and handling. Upon exploring interaction effects between the training and the clearinghouse treatment, we also find that the training becomes effective for agro-dealers that are also in the clearinghouse treatment group. This underscores the importance of incentives to make supply side interventions such as trainings effective.
    Keywords: UGANDA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; agricultural technology; technology adoption; farm inputs; knowledge; information transfer; information infrastructure; smallholders; agro-dealers; information clearinghouse
    Date: 2023
  4. By: Carlos Rodríguez-Castelán (World Bank, IZA); Emmanuel Vazquez (CEDLAS-IIE-FCE-UNLP)
    Abstract: Understanding the selection of workers into informality is a policy priority to design programs to increase formalization across Sub-Saharan Africa, where nine out of ten workers are informal. This paper estimates a model of self-selection with entry barriers into the formal sector to identify the extent of involuntary informality in Senegal, a representative country in terms of levels of informality in West Africa and with one of the most rigid labor markets in the world. Results show that the desire of being formal is greater for workers with formal education, married and with a lower proportion of children under the age of 5 living in the household. The individual's preference for the formal sector also grows with age at a decreasing rate. Results also show that labor informality is mainly a voluntary phenomenon with 30 percent of informal workers being involuntarily displaced into the informal sector. Results are robust to different model specifications, definitions of labor informality and heterogenous groups of workers.
    JEL: C21 C25 I32
    Date: 2023–10
  5. By: Nshakira-Rukundo, Emmanuel; Tabe-Ojong, Martin Paul Jr.; Gebrekidan, Bisrat Haile; Agaba, Monica; Surendran-Padmaja, Subash; Dhebibi, Boubaker
    Abstract: Climate change and conflicts co-exist in many countries with significant welfare and socio-environmental implications. Different approaches are being promoted to adapt and build resilience to these fragilities including the adoption of sustainable farm practices that have the potential to increase agricultural productivity and maintain environmental sustainability. We undertake a systematic review and perform a meta-analysis to understand and synthesize the adoption and impacts of agricultural technologies and natural resource management practices with a special attention to fragile and conflict affected settings. We employ state of the art machine learning methods to enable process and selection of appropriate papers from a universe of over 78, 000 papers from leading academic databases. We find that studies on adoption and impact of agricultural technologies and natural resource management practices are highly clustered around Ethiopia and Nigeria. We do not find any studies on Small Island States. We observe a wide array of characteristics that influence adoption of these technologies. Of the over 1400 estimates of determinants collected, majority predict input technologies while very few studies and estimates are found in relation to risk management and mechanisation technologies. Our meta-analysis shows an average effect size of 7 - 9% for the different technologies and practices. For the outcomes: land productivity, food security and household welfare, we obtain effect sizes of 6, 8 and 9% respectively. We do not observe much in terms of publication bias. Both climate and conflict vulnerability not only cause far more food insecurity, poverty, and degradation of the environment on their own but also reinforce each other through the climate change – conflict linkage. For these detrimental effects to be curtailed, utilisation of climate-smart agricultural technologies and natural resource management practices need to be encouraged. We thus lend credence to the development, dissemination and upscaling of these sustainable practices. We observe a lot of space for growth and adoption of these technologies.
    Keywords: technology adoption; natural resources management; fragility; conflicts; climate change; impact resilience; agricultural technology; mechanization; food security; poverty
    Date: 2023
  6. By: Madeline E. Duhon; Edward Miguel; Amos Njuguna; Daniela Pinto Veizaga; Michael W. Walker
    Abstract: The over-60 population in Sub-Saharan Africa is expected to grow rapidly in the coming decades, tripling between 2020 and 2050. Despite this explosive projected growth, few countries in the region have implemented policies designed to support older populations. Further, little research in economics has specifically examined aging in Sub-Saharan Africa, though many opportunities exist for economists to generate research evidence to inform the design of effective policies in this area. This paper combines insights from a cross-disciplinary review with original data analysis to characterize the challenges and opportunities facing older Sub-Saharan Africans in domains such as health and financial security. Informed by these findings, the paper identifies directions for future economic research and discusses how research evidence can inform the design of health care systems, pensions, and other public support programs to prepare for an aging Africa.
    JEL: H51 H55 J14 O10 O55
    Date: 2023–10
  7. By: Lisa Capretti (Department of Social Sciences and Economics, Sapienza University of Rome)
    Abstract: Climate-smart agriculture can address many of the challenges faced by agriculture in semi-arid areas. However, in many developing countries, the adoption and use of this kind of technology are still low. Knowledge constraints represent a critical barrier to adoption; hence, an effective extension system is key. In India, extension programs are characterized by partnerships involving the public sector, the private sector and NGOs. The latest approaches take advantage of mass media and video-based extension services. In this article, I assess the role of extension services on the adoption of laser land leveling among 604 households in the Indian state of Karnataka. Laser land leveling is a modern way of leveling fields using a laser machine; it also brings environmental, economic and social benefits. Using propensity score matching, I find that visiting the extension center Raita Samparka Kendra (RSK) or receiving visit from RSK officials at least once in a year increases the likelihood of using LLL. Furthermore, a causal mediation analysis reveals that after explaining the advantages of the technology and its cost, farmers develop a perception about the affordability of laser land leveling that mediates the treatment effects of the extension service on laser land leveling adoption. Another mechanism that mediates this relationship, even to a lesser extent, is the increase in farmers’ welfare, proxied by household expenditure.
    Keywords: Climate-smart agriculture, Extension services, Mediation analysis
    JEL: Q15 Q16 O12 O13 C31
    Date: 2023–01
  8. By: Isaac Koomson; Michael Danquah; Edward Martey
    Abstract: The ethnic diversity-financial inclusion nexus remains one of the least explored topics in the literature despite global attempts to promote cultural mixing due to its socioeconomic benefits. We contribute to the literature by examining the link between ethnic diversity and financial inclusion using five-wave panel data from South Africa, a country noted for its diverse ethnic groups with unique knowledge stock. We measure financial inclusion using a multidimensional construct, while ethnic diversity is conceptualized using fractionalization and polarization indexes.
    Keywords: Ethnic diversity, Financial inclusion, Employment, Ethnic group, South Africa
    Date: 2023
  9. By: Duggal, Khushi (University of Warwick)
    Abstract: Child marriage remains a prevalent practice in many countries around the world and can detrimentally affect various life outcomes for young women and girls. Using data from the India Human Development Survey (IHDS-II), this paper explores the relationship between early marriage and the educational attainment of Indian women. The study uses age of menarche as an instrumental variable to isolate the causal effect of marriage timing, with results indicating that each additional year that marriage is delayed is associated with 0.32 additional years of schooling and a 1.9 percentage-point increase in literacy. The findings highlight the lack of regulation of current marriage laws and the need for stringent enforcement, rather than the Indian government’s current aims to increase the legal age of marriage for women further. In addition, this study also conducts heterogeneity analysis to determine the possible benefit of this policy recommendation across different residence types, as well as estimates the effect of marriage timing on secondary outcomes.
    Keywords: Child marriage ; Early marriage ; Education ; Schooling ; India JEL classifications: I21 ; J12
    Date: 2023
  10. By: Aihounton, Ghislain; Christiaensen, Luc
    Abstract: Modern inputs and mechanization are promoted across Africa to raise smallholder labor productivity and broker the structural transformation. Yet, adoption has remained low and the implications for returns to labor and labor allocation remain poorly understood. This paper explores the effects of different intensification packages on farm performance, market orientation, and food security using data from lowland rice farmers in Côte d'Ivoire. Employing a multinomial treatment effect model, the findings reveal that intensification increases land and labor productivity, especially when agro-chemicals and mechanized land preparation are combined. Returns to labor double to triple, inducing specialization and greater market orientation as well as greater food security, while productively releasing agricultural labor for other activities. Labor in agriculture becomes more waged. The gender balance remains the same. Child labor input does not decrease. The findings call for greater attention to labor productivity and confirm that agricultural intensification can pay, and enhance rural transformation.
    Keywords: Food security; labor productivity; agricultural labor; rural transformation; structural transformation; market orientation; agricultural wage.
    Date: 2023–04–17
  11. By: Ome, Alejandro; Pérez, Javier
    Abstract: We study the impact of natural resource royalties on educational outcomes in Colombia. We analyze a reform enacted in 2012 that made the distribution of these royalties more equitable. Before the reform, most royalties were assigned to the regions where the natural resources were exploited; with the reform non-producing regions started to receive royalties. We estimate the impact of the reform on regions that most benefited from it, using the international price of oil as an instrument in a difference-in-differences framework. We found positive impacts on enrollment in primary, secondary, and high schools, but no conclusive evidence on academic achievement at any of these levels.
    Keywords: royalties;public finance;instrumental variables;transformación productiva;Extractivas;región andina;Andea Region
    JEL: C26 H52 H72 O13 O54
    Date: 2022–06
  12. By: Marybeth-Rouse (University of Johannesburg (South Africa)); Bernardo Batiz-Lazo (Anahuac University (Mexico) and Northumbria University (UK)); Santiago Carbo-Valverde (University of Valencia (Spain))
    Abstract: This paper explores the effectiveness of public policy in increasing financial inclusion. A large data set is used comprising repeat household surveys undertaken over a ten-year period. Contrary to previous results, the paper provides evidence of the strong impact of policy on access to financial services in South Africa. South Africa adopted a formal financial sector consensus model and, together with private sector development, succeeded in increasing access to financial services to the previously unbanked. The findings suggest that between 2005 and 2014, the most significant factors associated with financial inclusion were income, education level and age. Furthermore, those with a tertiary education were 31% more likely to have a bank account than those in the lowest education category. Policies to address the gender gap appear to have had a measure of success as the findings of this study indicate that women were 3.8% more likely to have a bank account than men. The findings further reveal that those from a black ethnic background remain less likely to be banked. Further policy interventions are therefore required.
    Keywords: Economic growth, financial inclusion, financial services, logistic regression, South Africa (SA)
    JEL: D14 G21 O4
    Date: 2023–02
  13. By: Bocquier, Philippe (University of the Witwatersrand, Johannesburg); Cha’Ngom, Narcisse (LISER); Docquier, Frédéric (LISER); Machado, Joël (LISER)
    Abstract: Existing empirical literature provides converging evidence that selective emigration enhances human capital accumulation in the world's poorest countries. However, the within-country distribution of such brain gain effects has received limited attention. Focusing on Senegal, we provide evidence that the brain gain mechanism primarily benefits the wealthiest regions that are internationally connected and have better access to education. Conversely, human capital responses are negligible in regions lacking international connectivity, and even negative in better connected regions with inadequate educational opportunities. These results extend to internal migration, implying that highly vulnerable populations are trapped in the least developed areas.
    Keywords: human capital, migration, selection, brain drain, brain gain, Senegal
    JEL: J24 J61 O15 R23 E24
    Date: 2023–10
  14. By: Boza-Núñez, Efraín; Vargas-Montoya, Luis; Robalino, Juan
    Abstract: Information and communications Technologies (ICT) are crucial in people's daily activities, including the job-related ones. Previous literature has acknowledged the potential of ICT to enhance labor market outcomes. However, empirical evidence is scarce and concentrated in developed countries. By using a rich longitudinal dataset, we apply a novel Differences and Differences (DiD) method to estimate the effect of the access to computers and internet over the labor market participation, employment and earnings. We further test whether there are complementarity effects of having access to the internet and computers simultaneously on the labor market outcomes and the likely differential effect by having access to broadband instead of lower speed connections. We found that the access to computers and the internet positively affects labor market participation, employment and earning. We further found that the simultaneous access to the internet and computers enhances their effect on employment and earnings. Policy makers should be aware that, in the digital era, the access to ICT is crucial to enhance the labor market outcomes. Particularly for developing countries, which along with poorer labor markets outcomes face higher digital divides.
    Date: 2023
  15. By: Pessino, Carola; Altinok, Nadir; Chagalj, Cristian
    Abstract: There is scant empirical economic research regarding the way that Latin American governments efficiently allocate their spending across different functions to achieve higher growth. While most papers restrict their analysis to the size of government, much less is known about the composition of spending and its implications for long-term growth. This paper sheds light on how allocating expenditures to investment in quality human and physical capital, and avoiding waste on inefficient expenditures, enhance growth in Latin America. This paper uses a novel dataset on physical and human capital and detailed public spending that includes -for the first time- Latin American countries, which is categorized by a cross-classification that provides the breakdown of government expenditure, both, by economic and by functional heads. The database covers 42 countries of the OECD and LAC between 1985 and 2017. There are five main results. First, the estimated growth equations show significant positive effects of the factors of production on growth and plausible convergence rates (about 2 percent). The estimated effect of the physical investment rate is positive and significant with a long-run elasticity of 1.2. Second, while the addition of years of education as a proxy for human capital tends to have no effect on growth, the addition of a new variable that measures quality-adjusted years of schooling as a proxy for human capital turns out to have a positive and significant effect across all specifications with a long-run elasticity of 1.1. However, if public spending on education (excluding infrastructure spending) is added to the factor specification, growth is not affected. This is mainly because, once quality is considered, spending more on teacher salaries has no effect on student outcomes. Therefore, the key is to increase quality, not just school performance or education spending. Third, both physical and human capital are equally important for growth: the effect of increasing one standard deviation of physical capital or human capital statistically has the same impact on economic growth. Fourth, increasing public investment spending (holding public spending constant) is positive and significant for growth (a 1% increase in public investment would increase the long-term GDP per capita by about 0.3 percent), in addition to the effect of the private investment rate. However, the effect of public spending on payroll, pensions and subsidies does not contribute to economic growth. Fifth, the overall effect of the size of public spending on economic growth is negative in most specifications. An increase in the size of government by about 1 percentage point would decrease 4.1 percent the long-run GDP per capita, but the more effective the government is, the less harmful the size of government is for long-term growth.
    Keywords: government size;growth;human capital;Latin America;public spending
    JEL: H50 I20 O40 O54
    Date: 2022–06

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