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on Development |
| By: | Dafne Murillo; Sebastian Sardon |
| Abstract: | State capacity may shape whether natural resources generate prosperity, as it determines if windfalls are effectively turned into useful projects or wasted. We test this hypothesis studying the 2004-2011 mining boom in Peru, where mines' profits are redistributed as windfall transfers to local governments. Our empirical strategy combines geological data with the central government's mining windfalls allocation formula to identify the windfalls' effects on household incomes and other measures of economic development. Proxying local state capacity with the ability to tax and relying on a triple difference strategy we uncover significant variation in treatment response, with positive effects of windfalls limited to high state capacity localities. We find suggestive evidence that only localities with high state capacity succeed at transforming windfalls into infrastructure stocks, which in turns contributes to structural transformation and market integration. Lastly, social unrest increases in low state capacity localities that receive windfalls but fail to perceive their benefits. Our findings underscore important complementarities between investments in extractive industries and in state capacity. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.09586 |
| By: | Tacsir, Ezequiel; Pereira, Mariano; Favata, Federico; Leone, Julian |
| Abstract: | Using a multilevel analysis and the new Harmonized Latin American Innovation Surveys Database (or LAIS database) augmented with indicators from the U.S. Census Bureau's Survey of Business Owners (SBO) and the World Banks World Integrated Trade Solution (WITS), this paper presents estimates of the effects of import competition and distance to the technological frontier on firm innovation in Latin American countries. Although innovation is recognized as a multilevel phenomenon, with investment decisions not solely affected by the firm characteristics but also by the context in which each firm is embedded, the empirical literature adopting a multilevel design is still nascent and scarce. Using a two-level random slope model allows us to overcome some of the pitfalls of traditional regression models when dealing with the hierarchical structure of data while allowing us to capture the influence of contextual factors. The results suggest that the fostering effect of foreign competition depends on the firms distance to the technological frontier. The estimates suggest that the lower the foreign competition and the greater the productivity gap, the lower the probability of firms engaging in innovation. In contrast, when a firm operates in a sector that is relatively closer to the technological frontier, firms invest in innovative activities to remain at the top. These results offer a clear and useful guide for designing policies in Latin America regarding innovation among firms. While it is important to promote and stimulate innovation efforts by firms, these factors should not be overlooked as considerations: sectoral characteristics associated with the economies, sectoral openness to foreign competition, and firms distance to the technological frontier. |
| Keywords: | innovation;Latin America;multilevel modeling;LAIS database;Productivity;Competition |
| JEL: | O31 O32 C21 C25 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13833 |
| By: | Chang, Jillie; Evans, David Kirkham; Rivas Herrera, Carolina |
| Abstract: | Poverty continues to challenge Latin American and Caribbean countries, with approximately one in three people in the region in poverty and one in seven in extreme poverty. This paper provides up-to-date insights through analysis of who the poor are, where they are located, and how they live in the region. First, it uses a large collection of household surveys that extend through 2023 to characterize the poor. It examines (1) how many people in the region are poor, (2) how the poor are distributed geographically within and across countries, (3) how poverty affects specific groups (e.g., women, children, Afro-descendants, and Indigenous people), (4) how much of the poverty in the region is chronic and how much is transitory, and (5) how poverty numbers have changed over time. Second, it identifies how the extreme and chronically poor live relative to others in their same countries, providing insights into policy responses. Specifically, it discusses (6) the living arrangements of the poor, (7) the assets they have access to, (8) how they earn their incomes, (9) how they access human capital services such as education and health, and (10) what access they have to social programs. While this analysis is descriptive, it may be useful both for targeting efforts and for generating new hypotheses for poverty reduction that can subsequently be tested causally. |
| Keywords: | Poverty;Development;Latin America and the Caribbean |
| JEL: | I25 J20 O10 O12 O15 O18 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13827 |
| By: | Pérez Urdiales, María; Tojal Ramos Dos Santos, Carolina |
| Abstract: | Latin America and the Caribbean (LAC) countries have made notable progress in reducing income inequality; however, the extent to which water and sanitation may foster inequalities remains unclear. In this sector, disparities emerge as lower-income households may encounter reduced access to clean water, utilize less water, or bear a disproportionately higher financial burden than higher-income households. In this paper, we investigate latter source of inequality in the water and sanitation sector in LAC. We analyze and compare inequality measures for water expenditures and income for Brazil, Colombia, Costa Rica, and Uruguay using survey data from the Americas Barometer of the Latin American Opinion Project (LAPOP). Our descriptive analysis indicates that low-income households allocate a larger proportion of their income to water expenditures compared to high-income households. By comparing the water concentration curve to the Lorenz curve for each country, we find that water expenditures are generally more equitably distributed than income, leading to an unequalizing effect, as households spend similar amounts regardless of income level. Additionally, we demonstrate that total water expenditures, encompassing tap water, bottled water, and water delivered by trucks, align more closely with income distribution than tap water alone in Brazil, Costa Rica, and Uruguay, whereas the opposite is true for Colombia. These disparities may be attributed to water tariff subsidies and the higher consumption of bottled water among wealthier households. |
| Keywords: | water security;sustainable development;tariffs;subsidies;Equality |
| JEL: | Q25 Q21 O54 O13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13828 |
| By: | Azizbek Tokhirov (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences, Prague, Czech Republic; GEOMIGRACE, Geographic Migration Centre, Department of Social Geography and Regional Development, Faculty of Science, Charles University) |
| Abstract: | I investigate the consequences of income fluctuations caused by commodity price changes on happiness levels in regions specialising in export agriculture. Using a difference-in- differences framework, I compare subjective well-being patterns of households living in cotton and non-cotton geographical areas of Tajikistan before and after the 2010/11 cotton price increase. The results indicate that exposure to income fluctuations, even to a positive one, is associated with a notable decrease in the reported levels of financial and overall life satisfaction. The well-being changes are mainly observed between households engaged in agricultural employment, the number of which became larger only in cotton regions in response to the shock. The results of triple difference-in-differences estimations reveal that remittances mediate the negative effects of export price fluctuations but only on financial satisfaction, suggesting that a mere compensation of income losses does not fully restore subjective well-being. |
| Keywords: | subjective well-being, export prices, household income, remittances |
| JEL: | I31 Q02 |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:ost:wpaper:400 |
| By: | Al Mujtabe, Abdullah; Rahman, Shohanur; Sheikh, Limon; Adri, Neelopal; Waliullah, |
| Abstract: | Agriculture based economy makes the rural areas important in south-east Asia. Lack of accessibility to certain services were observed in countries like, Pakistan, Bangladesh, India etc. As a result, rural-urban migration became a regular practice. Though spatial dimension of accessibility was studied, non-spatial dimension was mostly unexplored for access to education, healthcare, food and modern agricultural services. So, with ten villages of Bangladesh as study area, 452 questionnaire surveys, 22 FGDs and 27 KIIs were conducted to understand the problems behind lack of access to these services. Different statistical tests, and qualitative comparison suggested that non-farm activities were more sustainable for households, and provided more access to services than fully farmingbased households. Some services were available, but inaccessible to the local people due to mismanagement. Livelihood diversification through collaboration of community and women empowerment could be the sustainable solutions for ensuring proper service accessibility in developing countries. |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3789u |
| By: | Paul, Saumik (University of Manchester) |
| Abstract: | Since the advent of British rule in 1765, the colony of Bengal, once hailed as the most fertile and prosperous region of India, witnessed numerous incidents of food shortages. Apart from the supply and demand side factors are typically associated with a food shortage at an escalated or disastrous level (famine), the role of persistent and long-term factors is also critical. This paper, both qualitatively and quantitatively, provides a deeper understanding of the process of agrarian transformation in Bengal. It argues that the 1943 Bengal famine could have been less likely had there been a buoyant agricultural credit market and a better patronage system with less exploitative farming practices. Quantitatively, I find that frequency of distress sale of occupancy holdings in the 1930s is positively associated with the famine intensity throughout many districts, and this relationship increases in the presence of sharecroppers' struggles. |
| Keywords: | famine, land transfer, Bengal |
| JEL: | N O |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17432 |